In: Accounting
Elga plans to invest $175 every month by purchasing units of a diversified equity mutual fund. |
If the fund generates an overall rate of return of 6% compounded monthly, what will her holdings be worth after 8.25 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) |
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Every month 175 dollars SBI invested @ 6% compounded monthly over the period of 8.25 years.
8.25 years = 99 months.
In this question I have assumed that the first investment is made at the beginning of the month therefore interest for that particular month will also be calculated.
Also in the given below pictures I have calculated the holding as per 6% monthly as well as 6% annually rate of return because in the question it is not clearly given whether the 6% rate is monthly or annually.
So answer as per 6% interest rate is equal to $986,539.4103 and 0.5 % interest rate is equal to $ 22,458.397
For your reference I have attached the formula file also.