Final answer:
The question involves calculating the future value of monthly deposits of $470.00 over seven years at an annual interest rate of 10.8% compounded monthly. By applying the annuity formula for future value, we can determine the total amount after the specified period, demonstrating how compound interest affects savings.
Step-by-step explanation:
The question is asking for the future value of an annuity with regular deposits.
Using the formula for the future value of an annuity, we calculate what the monthly deposits of $470.00 will grow to over the course of seven years, with interest of 10.8% compounded monthly.
The formula for the future value of an annuity compounded monthly is Future Value = P × ((1 + r/n)^(nt) - 1) / (r/n), where P is the monthly deposit, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.
To calculate the total future amount, we plug in the values: P = 470, r = 0.108, n = 12 (since interest is compounded monthly), and t = 7.
This calculation will yield the total amount of money that the deposits will amount to after seven years, showing the significant impact of compound interest over time.