Question

Ashley makes deposits of $293 monthly (at the end of each month) into an account that pays 1.7% interest compounded monthly.

How much money will be in the account after 5 years?

Answer 1

Given the following:

P=$293, r= 1.7%(0.017), n= 5, and m= 12

The FV of the deposits is given as $FV=\frac{A{(1+\frac{r}{m})^{mn}}}{\frac{r}{m}}$

$FV=\frac{293{(1+\frac{0 .017}{12})^{12×5}}}{\frac{0.017}{12}}$

$FV=183661.93$

The amount in the account after 5 years will be $183661.93