Question

Find the savings plan balance after15 months with an APR of 15 ​% and monthly payments of ​$. 300

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Part 1
The balance is

enter your response here.
​(Do not round until the final answer. Then round to the nearest cent as​ needed.)

Answer 1

$5,184

Explanation:

Assuming that the savings plan balance starts at zero, we can use the formula for the future value of an annuity to calculate the balance after 15 months:

FV = PMT x ((1 + r)^n - 1) / r

where PMT is the monthly payment, r is the monthly interest rate (15% / 12 = 0.0125), and n is the number of payments (15).

Plugging in the numbers, we get:

FV = 300 x ((1 + 0.0125)^15 - 1) / 0.0125

FV = 300 x (1.216 - 1) / 0.0125

FV = 300 x 17.28

FV = 5,184

Therefore, the savings plan balance after 15 months with an APR of 15% and monthly payments of $300 is $5,184.

Answer 2

We can use the formula for the future value of an annuity to solve this problem:

FV = PMT * ((1 + r)^n - 1) / r

where FV is the future value of the savings plan, PMT is the monthly payment, r is the monthly interest rate (APR/12), and n is the number of months.

Substituting the given values, we get:

FV = 300 * ((1 + 0.15/12)^15 - 1) / (0.15/12)

FV = $4,936.55 (rounded to the nearest cent)

Therefore, the balance in the savings plan after 15 months is $4,936.55