Question

If you make an initial deposit of $2,500 in your money market account that earns 6% APR compounded daily, and you deposit $100 at each week end for 25 years, how much money will you have accumulated

Answer 1

$312,752

Step-by-step explanation:

Weekly interest rate = [(0.06/365 + 1)^7] -1 * 100

Weekly interest rate = 1.0011525255 - 1 * 100

Weekly interest rate = 0.0011525255 * 100

Weekly interest rate = 0.1152%

No. of periods =52 weeks * 25 years = 1300

N = 1300; I/Y = 0.1152; PV = -2500; PMT = -100

Amount accumulated at the end = FV(1300, 0.1152, -2500, -100)

Amount accumulated at the end = $312,752 approximately