Question

Robert Plant deposits $25 each month into a savings account that pays 4.0% annual interest. How much will be in the account after 36 months, if interest compounds monthly

Answer 1

FV= $953.97

Step-by-step explanation:

Giving the following information:

Monthly deposit= $25

Interest rate= 0.04/12= 0.0033

Number of periods= 36

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

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

A= monthly deposit

FV= {25*[(1.0033^36) - 1]} / 0.0033

FV= $953.97