If you deposit $20 monthly into an account that pays 12% annually (but compounds the interest...
If you deposit $20 monthly into an account that pays 12% annually (but compounds the interest monthly), what is the value of the account after 1 year? Answer in dollars and cents
Homework Answers
This question requires application of FV of annuity formula, according to which
r = 12%/12 = 1% (monthly), n = 1 * 12 months = 12
![FV = 20 * [\frac{(1 + 0.01)^{12} - 1}{0.01}]](http://img.homeworklib.com/questions/3e10eb50-753e-11ea-90bd-310919165864.png?x-oss-process=image/resize,w_560)
FV = 20 * 12.6825
FV = $253.65
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