Answer to Question #145604 in Financial Math for Tyanna

Question

Recently, More Money 4U offered an annuity that pays 6.3% compounded monthly. If $1,848 is deposited into this annuity every​ month, how much is in the account after ​years? How much of this is​ interest?

Answer 1

Let the term be 3 years, than we solved by formula:

$FV=A\times\frac{(1+i)^n-1}{i}$

$i=\frac{0.063}{12}=0.00525$

$n=3*12=36$

$FV=A\times\frac{(1+i)^n-1}{i}=1848\times\frac{(1+0.00525)^{36}-1}{0.00525}=73020.24$

interest

$73020.24-1848\times36=73020.24-66528=6492.24$