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Suppose you save $75 a month for 30 years. If you are able to earn 6%...

Suppose you save $75 a month for 30 years. If you are able to earn 6% per year on your savings, how much will you have accumulated by the end of 30 years? Assume monthly compounding.

Solutions

Expert Solution

Future value of annuity = payment per period * [(1+i)^n-1]/i

i = interest rate per period

n = number of periods

=>

Future value = 75 * [(1+0.06/12)^360 - 1]/(0.06/12)

= 75338.63

jeff jeffy answered 2 years ago
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