An individual deposits $100 per month into an account which pays interest at a rate of...
An individual deposits $100 per month into an account which pays interest at a rate of 6% per year compounded monthly. The value of the account after five years is closest to:
a. $5,630
b. $6,210
c. $6,764
d. $6,977
Homework Answers
Answer
Option d
The formula is:
A=monthly payment =100
r=monthly interest rate =6/12=0.5%
n=number of months=12*5=60
FV=future value in the account=?
then,
FV=100*\frac{(1+0.005)^{60}-1}{0.005}=
6977.00305 |
The amount in the deposit is $6977.00305.
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