Question

Since your first​ birthday, your grandparents have been depositing $ 120 into a savings account every month. The account pays 6​% interest annually. Immediately after your grandparents make the deposit on your 18th​ birthday, the amount of money in your savings account will be closest​ to:

Answer 1

FV= $46,482.38

Step-by-step explanation:

Giving the following information:

Monthly deposit= $120

Interest rate= 0.06/12= 0.005

Number of periods= 18*12= 216

To calculate the future value of the investment, we need to use the following formula:

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

A= monthly deposit

FV= {120*[(1.005^216) - 1]} / 0.005

FV= $46,482.38