Final answer:
The question is about calculating the future value of an annuity with monthly deposits, using a 4.8% annual interest rate, compounded monthly, over 7 years. The future value is determined using the annuity formula, and the interest earned is the total value minus the sum of deposits.
Step-by-step explanation:
The question involves the concept of compound interest applied to an annuity. A monthly deposit of $1,485 is made into an annuity that offers a 4.8% annual interest rate compounded monthly. To determine the total amount in the account after 7 years, we can use the future value of an annuity formula, which is:
Future Value = Pmt × {[(1 + r/n)^(nt) - 1] / (r/n)}
Where Pmt = monthly payment, r = annual interest rate, n = number of times interest is compounded per year, and t = number of years.
To calculate the total interest earned, we subtract the total amount of the deposits from the future value of the annuity. The total deposits over 7 years are $1,485 × 12 months × 7 years.
Although the question does not require a step-by-step calculation, it is understood that applying the formula will provide the total account value and the interest earned can be calculated thereafter.