Question
In: Finance
to save the retirement plan, Dr lola plans to deposit $200 every month in a saving...
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
Solutions
Expert Solution
| 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
please rate.
jeff jeffy answered 2 years agoRelated Solutions
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