Homework Answers
Information provided:
Monthly saving= $50
Time= 15 years*12= 180 months
Interest rate= 10%/12= 0.0833% per month
The question is solved by computing the future value of the annuity.
Enter the below in a financial calculator to compute the future value of the annuity:
PMT= 50
N= 180
I/Y= 0.0833
Press the CPT key and FV to compute the future value of the annuity.
The value obtained is 20,723.5173.
Therefore, the amount saved by the time his son is 18 years old is $20,723.52.
In case of any query, kindly comment on the solution
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