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An investor pays $200/month into a real estate investment that promises to pay 7% annually, compounding...

An investor pays $200/month into a real estate investment that promises to pay 7% annually, compounding monthly. If investor pays into this for 4 years, what’s his value in 4 years?

10,735.02 8,352.19 887.98 11,041.75

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Expert Solution

200.00 deposits on a Monthly basis, at 7% annually rate of interest after 4 Years your savings account will have grown to 11,370.67 -- of which 9,800.00 is the total of your beginning balance plus deposits, and 1,570.67 is the total interest earnings.

Formula for compound interest :-

The compound interest formula is: A = P (1 + r/n)nt

The compound interest formula solves for the future value of your investment (A). The variables are: P – the principal (the amount of money you start with); r – the annual nominal interest rate before compounding; t – time, in years; and n – the number of compounding periods in each year (for example, 365 for daily, 12 for monthly.

jeff jeffy answered 2 years ago
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