Suppose that you deposit $391 in a savings account at Prosperity Bank at the end of...

Suppose that you deposit $391 in a savings account at Prosperity Bank at the end of each of the next 10 months. You plan to leave these contributions and any interest earned in the account until 10 months are up. The interest rate is 6.38% per month. What is the future value of your account at the end of the holding period? Do not round at intermediate steps in your calculation. Round your final answer to the nearest penny. Do not type the $ symbol.

Expert Solution


Future Value (FV) of Cash flow:
(Cash Flow)*((1+i)^N)
i=interest rate/period =6.38%=0.0638
N=Number of periods to the future
A	N=(10-A)	B	FV=B*(1.0638^N)
MONTH	Number of months to future	Amount of Deposit	Future Value
1	9	391	682.207723
2	8	391	641.293215
3	7	391	602.832502
4	6	391	566.678419
5	5	391	532.692629
6	4	391	500.745092
7	3	391	470.713567
8	2	391	442.483142
9	1	391	415.945800
10	0	391	391.000000
		TOTAL	5246.592088
Future value at the end of holding period	5246.59

jeff jeffy answered 5 months ago

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