Question

Find the savings balance after 9 months with an APR of 4% and monthly payment of $250.

Answer 1

$ 2533.594

Explanation:

The saving balance is found by the equation;

`SV=P*[((1+i)^n -1)/i]`

where P=monthly payments, i= interest rate n=period

Given ;

P= $250 n=9months and i=6%(0.04) per year, find savings balance?

Note than n is given in months so we divide the rate by 12 i.e

0.04/12 =0.003

Substitute values in the formulae;

SV= 250 × [((1+0.003)^9 - 1)/0.003)]

`SV= 250* [((1+0.003)^9 -1 )/0.003]\\\\SV=250*[(1.003)^9 -1)/0.003]\\\\SV=250*[(1.0304 -1)/0.003]\\\\SV=250*[0.0304/0.003]\\\\SV=250*10.134\\\\SV=2533.594`