Question

Lauren plans to deposit $3000 into a bank account at the beginning of next month and $175/month into the same account at the end of that month and at the end of each subsequent month for the next 4 years. If her bank pays interest at a rate of 7%/year compounded monthly, how much will Lauren have in her account at the end of 4 years? (Assume she makes no withdrawals during the 4-year period. Round your answer to the nearest cent.)

Answer 1

Mintout mate, 7% nnumber of months/ internals -la t, duration of hayment • 4 years A monthly instalment . $175 pv, present nalue . $ 3000 FV, final value Fv int- Ev, pv (14 miljotenta /(1+)*1) pv (it on + 37 (12)(4) - 3000 (1 +0.07.) mitten + 175 (1+007) – 1 30001 +0.07 (12)6)-1 + 175 12 - 3000 [-005833)** + 175 (1.005833)** 0.005833 z 3000 1.314-387] + 175 f 0.322054 € 0.005833 + 175 [55. 209 236) e 3000 [1.314387 3943.16 + 9661.62 • 13,604.78 $ 13,604.78 Hee account balance in 4 years is