Question

You are planning to make monthly deposits of $70 into a retirement account that pays 12 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 24 years

Answer 1

FV= $115,928.81

Step-by-step explanation:

Giving the following information:

Monthly deposit= $70

Interest rate= 0.12/12= 0.01

n= 24*12= 288

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

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

A= monthly deposit

FV= {70*[(1.01^288) - 1]} / 0.01

FV= $115,928.81