Answer:
To calculate the future value (FV) of an investment with a given return on balance, monthly rate of return, monthly payment, and number of payments, you can use the future value of an ordinary annuity formula:
FV = P * ((1 + r)^n - 1) / r
Where:
FV = Future value
P = Monthly payment
r = Monthly rate of return (expressed as a decimal)
n = Number of payments
In this case, the return on balance and the monthly rate of return are provided separately. To incorporate the return on balance into the monthly rate of return, you can use the following formula:
Effective Monthly Rate of Return = (1 + Monthly Rate of Return) * (1 + Return on Balance) - 1
Let's calculate the effective monthly rate of return using the given values:
Return on Balance = 7.00% (expressed as a decimal) = 0.07
Monthly Rate of Return = 0.583% (expressed as a decimal) = 0.00583
Effective Monthly Rate of Return = (1 + 0.00583) * (1 + 0.07) - 1
= 1.00583 * 1.07 - 1
= 1.0761281 - 1
= 0.0761281
Now that we have the effective monthly rate of return, we can use the future value formula to calculate the future value:
FV = -$200 * ((1 + 0.0761281)^120 - 1) / 0.0761281
Please note that since the monthly payment is negative (-$200), it indicates that it is an outgoing payment or an investment with regular withdrawals.
Calculating the above formula will give you the future value of the investment.
I hope I was helpful