Question

You are planning to make monthly deposits of $90 into a retirement account that pays 10 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 19 years?

Answer 1

$71,644.27

Step-by-step explanation:

Future value of the deposit in 19 years = Monthly deposit * [(1 + interest rate/12)^12*No. of years - 1] / (interest rate/12

= $90 * [(1 + 10%/12)^12*19 - 1] / (10%/12)

= $90 * [6.63346333924 - 1] / 0.008333

= $90 * 6.63346333924/0.008333

= $90 * 796.0474

= $71644.269835

= $71,644.27