Question

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Assume you begin saving $25/month beginning today in an account that has a 2.75% APR for 25 years.

Answer 1

The amount in account after 5 years at 2.75 APR is $ 8589.525

Explanation:

Given as :

The amount save in the account per months = $ 25

The time period of saving = 25 years = 25 × 12 = 300 months

So, Amount saved in account for 300 months = $ 25 × 300 = $ 7500

The annual percentage rate = 2.75 %

From Compounded method

Amount = Principal ×
`(1+(\testrm Rate)/(100))^(\textrm Time)`

So, Amount = $ 7500 ×
`(1+(\testrm 2.75)/(100))^(\textrm 5)`

Or, Amount = $ 7500 ×
`(1.0275)^(5)`

or, Amount = $ 7500 × 1.14527

∴ Amount = $ 8589.525

Hence The amount in account after 5 years at 2.75 APR is $ 8589.525 Answer