Question

Find the amount accumulated FV in the given annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.)

$300 is deposited monthly for 10 years at 5% per year in an account containing $3,000 at the start

Answer 1

To find the amount accumulated in the annuity account, we can use the formula for future value of an annuity. Plugging in the given values, the amount accumulated is approximately $50,299.92.

Step-by-step explanation:

To find the amount accumulated in the annuity account, we can use the formula for future value of an annuity:

`FV = P * [(1 + r)^n - 1] / r`

where:
P = monthly deposit amount = $300
r = interest rate per compounding period = 5% / 12 = 0.4167%
n = number of compounding periods = 10 years * 12 = 120

Plugging in these values, we get:

FV = 300 * [(1 + 0.4167%)^120 - 1] / 0.4167%

= $50,299.92

Therefore, the amount accumulated in the annuity account is approximately $50,299.92.