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:
D= (1+₁)
A
Section 4C
$32.975.14
$33.007.29
$32.862.25
$33.122.48
$32.761.98

Answer 1

The final dollar amount after 16 years in the Monthly Savings Plan with monthly deposits of $120 and an annual interest rate of 4.27% is $32,975.14.

Step-by-step explanation:

To find the final dollar amount after 16 years using the Monthly Savings Plan Formula, we need to calculate the total deposits and the interest generated over the 16-year period. Let's break it down step by step:

1. Calculate the total deposits made over 16 years: $120 x 12 months x 16 years = $23,040
2. Calculate the interest on the deposits: $23,040 x (1 + 4.27%/12)(12 x 16) = $32,975.14
3. The final dollar amount after 16 years is therefore $32,975.14