Question

Help!! someone please. Find the savings plan balance after 24 months with an APR of 2.5% and monthly payments of $400. Assume an ordinary annuity.

Answer 1

The formula for this calculation is Future Value = Payment • [((1 + I)n - 1)/I], where I = interest rate, and n = periods.

In this case, P = $8400/month, n = 24 months, and I = 2.5% (0.025) per year.

Since the information involves months instead of years, it is necessary to divide the interest rate by 12 to obtain the monthly rate. So, 0.025 ÷ 12 = =0.0020833333