Question

In: Finance

You are planning to make monthly deposits of $120 into a retirement account that pays 9...

You are planning to make monthly deposits of $120 into a retirement account that pays 9 percent annual interest (APR), compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 19 years?


rev: 09_17_2012

Multiple Choice

  • $71,900.73

  • $75,495.77

  • $66,266.58

  • $68,305.69

  • $862,808.76

Solutions

Expert Solution

PMT = $120
Rate = 9% / 12 = 0.75%
Nper = 19 * 12 = 228
PV = 0

Future value can be calculated by using the following excel formula:
=FV(rate,nper,pmt,pv)
=FV(0.75%,228,-120,0)
= $71,900.73

Amount at the end of 19 years = $71,900.73

jeff jeffy answered 2 years ago
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