Question

to save the retirement plan, Dr lola plans to deposit $200 every month in a saving account from next month for 10 years. the banks pays 6% interest rate compounding monthly. calculate the total balnce by the end of year 10

Answer 1

FV of annuity	=	P * [ (1+r)^n -1 ]/ r
Periodic payment	P=	$                   200.00
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		10
Number of payments in a year		12
Total number of periods	n=	120
FV of annuity	=	200* [ (1+0.005)^120 -1]/0.005
FV of annuity	=	32,775.87

Answer is $32,775.87

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