Question

Your parents are giving you $250 a month for 4 years while you are in college. At an interest rate of .57 percent per month, what are these payments worth to you when you first start college

Answer 1

FV= $13,757.37

Step-by-step explanation:

Giving the following information:

Monthly payment= $250

Interest rate= 0.0057

Number of periods= 4*12= 48

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

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

A= monthly payment

FV= {250*[(1.0057^48) - 1]} / 0.0057

FV= $13,757.37