Question

Dave deposits $400.00 each month into an annuity with a 3.25% interest rate compounded quarterly. What is the account balance after 10 years?

Answer 1

I think it’s 4,003.25 sorry if I got it wrong

Answer 2

A = $552.89

Explanation:

Use the compound amount formula A = P(1 + r/n)^(nt). n represents the number of times the interest is compounded per year and r is the interest rate as a decimal fraction.

Here,

A = $400(1 + 0.0325/4)^(4*10)

= $400(1.3822)

A = $552.89