Question

Gabrielle deposits $350 at the end of every quarter for 5 years and 6 months in a retirement fund at 3.80% compounded monthly. What is the future value of the retirement fund?

Answer 1

To calculate the future value of the retirement fund, we can use the formula for compound interest. Plugging in the given values, we can solve the equation to find the future value.

Step-by-step explanation:

To calculate the future value of the retirement fund, we can use the formula for compound interest:

• Principal Amount (P) = $350
• Interest Rate (r) = 3.80% per year, compounded monthly
• Number of Periods (n) = 5 years and 6 months = 5.5 years = 22 quarters

The future value (FV) can be calculated using the formula:

FV = P * (1 + r/n)^(n*t)

Plugging in the values, we get:

FV = $350 * (1 + 0.038/4)^(4 * 5.5)

Solving this equation will give us the future value of the retirement fund.