In order to accumulate enough money for a down payment on a house, a couple deposits...

In order to accumulate enough money for a down payment on a house, a couple deposits $472 per month into an account paying 6% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 3 years?

Round to the nearest dollar

Expert Solution

FV of annuity	=	P * [ (1+r)^{^n} -1 ]/ r

Periodic payment	P=	472

rate of interest per period	r=
Rate of interest per year		6.0000%
Payment frequency		Once in 1 months
Number of payments in a year		12.00
rate of interest per period		0.06*1/12	0.5000%


Number of periods
Number of years		3
Number of payments in a year		12
Total number of periods	n=	36


FV of annuity	=	472* [ (1+0.005)^36 -1]/0.005

FV of annuity	=	18,566.64

Couple will have 18,566.64 in three years

ekkarill92 answered 3 years ago

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