Question

Use your TVM Solver to determine the future balance in a mutual fund account (a type of investment account) if you make weekly payments of $50 into an account that pays 2.0% interest compounded monthly. You open the account with $500 and pay into the account for 15 years.

Answer 1

$46,141.71

Explanation:

This looks about right, based on weekly deposits for the duration. However, I cannot vouch for it entirely, as the number of weekly deposits in 15 years will actually be 782.

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Computing this by hand doing the initial balance separately from the weekly deposits, I get a total of $46,252.10 using 782 weekly deposits. For that purpose, I tried to figure an equivalent weekly interest rate given monthly compounding and the fact there are 52 5/28 weeks in a year on average.

I suspect the only way to get this to the cent would be to build a spreadsheet with payment dates and interest computation/payment dates. Some months, there would be 5 deposits between interest computations; some years there would be 53 deposits.