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To save for​ retirement, a student invests ​$60 each month in an ordinary annuity with 6 % interest compounded monthly. Determine the accumulated amount in the​ student's annuity after 35 years.
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To save for​ retirement, a student invests ​$60 each month in an ordinary annuity with 6 % interest compounded monthly. Determine the accumulated amount in the​ student's annuity after 35 years.

User Tim Santeford
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Answer:

The student invests $60 each month and the interest rate is 6%. The interest rate is compounded monthly so we will take the interest rate as 0.5% (6/12).

The number of periods will be 420 (35*12) as the payments are made every month.

The present value is 0 as he is not making any investment at the start.

We need to find the future value of these payments, and for that we need to put these values in a financial calculator

PV= 0

PMT= 60

I= 0.5

N=420

Compute FV

FV=85,482

The total accumulated amount in the students annuity will be $85,482.

Step-by-step explanation:

User MMalke
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