Suppose you save $1,000 per month for 35 years. The bank promises you an annual interest...

Suppose you save $1,000 per month for 35 years. The bank promises you an annual interest rate of 3% compounded monthly. How much will the savings account be worth in 35 years? (Assume no withdrawals take place).

420,000.00

$741,563.66

$913,730.94

$1,523,212.27

Expert Solution

P = $1000, n = 35 * 12 = 420 months, r = 3%/12 = 0.25% (monthly)

FV = 1000 * 741.56366

FV = $741,563.66

jeff jeffy answered 2 years ago

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Suppose you save $1,000 per month for 35 years. The bank promises you an annual interest...

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