Question

Linda and Rob open an online savings account that has a 2.89% annual interest rate, compounded

weekly. If they deposit $35 every week, how much will be in the account after 15 years?

Answer 1

FV= $34,222.33

Explanation:

First, we need to calculate the weekly interest rate:

Weekly interest rate= 0.0289/52= 0.00056

To calculate the future value (FV), we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= weekly deposit

n= 15*52= 780

A= $35

FV= {35*[(1.00056^780) - 1]} / 0.00056

FV= $34,222.33