Question

Sean and sarah spend $70 a month eating out how much money would they have after 15 years if they invested the money instead at 4 percent compounded monthly round your answer to the nearest hundredth

Answer 1

Future Value= $17,170.12

Explanation:

Giving the following information:

Monthly deposit (A)= $70

Interest rate (i)= 0.04/12= 0.0033

Number of periods (n)= 15*12= 180 months

To calculate the future value (amount saved), we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

FV= {70*[(1.0033^180) - 1]} / 0.0033

FV= $17,170.12