Question

Mrs. Simpson is saving for her retirement. If she makes a payment of $1,000 at the end of each month for 15 years and earns a rate of 5.25% compounded 12 times per year, how much will she have in her retirement account when she is ready to retire

Answer 1

$272,942.36

Step-by-step explanation:

The formula for calculating future value = A (B / r)

B = [(1 + r) ^mn] - 1

FV = Future value

P = Present value

R = interest rate

m = number of compounding per month

N = number of years = 0,0525 /12 = 0,004375

$1,000 (1.004375)^180 - 1 / 0,004375 =$272,942.36