Question

You put $300 at the end of each month in an investment plan that pays 7% interest, compounded monthly. how much will you have after 18 years? round all answers to the nearest cent, when applicable.

Answer 1

$129,000

Step-by-step explanation:

P=$300

r=7%/12

=0.07/12

=0.0058

n=12×18=216

A×{(1+r)^n-1}/r

$300×{(1+0.0058)^216-1}/0.0058

$300×{(1.0058)^216-1}/0.0058

$300×(3.489-1)/0.0058

$300×(2.489)/0.0058

$300×429.14

$300×430 to the nearest cent

$129,000

Answer 2

Answer: $129,216.22

Step-by-step explanation:

Given the following ;

Annuity(A) = $300

Annual rate = 7% = 0.07

Monthly rate = 0.07÷12 = 0.0058333

Period(n) = 18 years = 216 months

FVA = How much the annuity(A) invested each month will be worth at a monthly rate of 0.0058333 after 18 years.

FVA = A ×[ (1 + r)^n - 1] ÷ r

FVA = 300×[(1+0.0058333)^216

- 1]÷0.0058333

FVA = 300 × [1.0058333^216 - 1] ÷ 0.0058333

FVA = (300 × 2.512514178331248) ÷ 0.0058333

FVA = 753.757 ÷ 0.0058333

FVA = $129,216.22