future value calculated by the formula
"FV=PMT\\frac{(1+i)^n-1}{i}"
where FV future value
PMT = $1,251 payment every month
i = 5.4%/12 = 0.45% = 0.0045
n = 12*8 = 96 payment period in months
"FV=1251\\frac{(1+0.0045)^{96}-1}{0.0045}\\approx149798"
"FV" = $149,798 amount in the account
amount of interest earned
"FV -nPMT= 149798-96*1251=29702"
amount of interest earned $29,702
Answer: $149,798 amount in the account; amount of interest earned $29,702
Comments
Leave a comment