Answer – C. $20,638.21
SOLVINGS
$765.13 is deposited at the end of each month for 2 years in an account paying 12% interest compounded monthly. Find the amount of the account.
Given,
Payment per period, PMT = $765.13
Number of periods, n = 2 years = 24 months
Interest rate per period, i = 0.12/12 = 0.01
Future value, FV is unknown
Using the formula, FV = PMT [((1 + i) ^n – 1) / i]
FV = 765.13 X [(1 + 0.01)^24 – 1)/0.01]
FV = 765.13 X [(1.01)^24 – 1)/0.01]
FV = 765.13 X [(1.269734649 – 1) /0.01]
FV = 765.13 X (0.269734649/0.01)
FV = 765.13 X 26.9734649
FV = 20,638.207198937
To the nearest cent, the Future value, FV = $20,638.21