Question

A payment of $200 is made at the end of each month into an account paying a 7.5% annual interest rate, compounded monthly for 30 years. What is the future value of the account after 30 years

Answer 1

FV= $269,489.09

Step-by-step explanation:

Giving the following information:

Monthly payment= $200

Interest rate= 0.075/12= 0.00625

Number of periods= 30*12= 360

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

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

A= monthly deposit

FV= {200*[(1.00625^360) - 1]} / 0.00625

FV= $269,489.09