Question

A person makes monthly DEPOSITS of $120 in a Monthly Savings Plan with an annual

INTEREST RATE of 4.27%.
Use the Monthly Savings Plan Formula to find the final dollar AMOUNT after 16 YEARS.
The Monthly Savings Plan Formula:
De 1+
A
Section 4C
()
$32.975.14
$33.007.29
$32.862.25
$33.122.48
$32.761.98

Answer 1

To find the final amount in the Monthly Savings Plan after 16 years, use the formula A = D * [(1 + r)^n - 1] / r, where A is the final amount, D is the monthly deposit, r is the monthly interest rate, and n is the number of months. Plugging in the given values, the final dollar amount is $32,975.14.

option a is the correct

Step-by-step explanation:

To find the final amount in the Monthly Savings Plan after 16 years, we can use the formula A = D * [(1 + r)^n - 1] / r, where A is the final dollar amount, D is the monthly deposit, r is the monthly interest rate, and n is the number of months.

In this case, D = $120, r = 4.27% / 12 = 0.03558, and n = 16 * 12 = 192.

Plugging in these values into the formula, we get A = $120 * [(1 + 0.03558)^192 - 1] / 0.03558 = $32,975.14.

Therefore, the final dollar amount after 16 years in the Monthly Savings Plan is $32,975.14.