$1,000 deposits are made into an investment account at the end of year 1, 2, and 3

$1,000 deposits are made into an investment account at the end of year 1, 2, and 3. No deposit was made in year 4. Interest accrues at 5.0% monthly. What is the balance in the account at the end of Year 5?

$3,666
$3,487
$3,476
$3,649

Expert Solution

We knwo that,

Future Value = Amount * (1+ monthly rate)^(end period - current period) + Amount * (1+ monthly rate)^(end period - current period) + Amount * (1+ monthly rate)^(end period - current period) .................

Future Value = 1000*(1+0.05/12)^(12*5-12*1) + 1000*(1+0.05/12)^(12*5-12*2) + 1000*(1+0.05/12)^(12*5-12*3)

= 3487.31 Answer

The option B is correct.

jeff jeffy answered 2 years ago

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