Question

Luis deposits $130.00 into his retirement fund at the beginning of every month for 16 years. The interest rate on the fund was 3.50% compounded monthly for the first 11 years and 4.40% compounded monthly for the next 5 years. a. Calculate the value of the fund at the end of the 16-year term. $0.00 Round to the nearest cent b. How much of this is interest? Round to the nearest cent Next Question

Answer 1

Total Deposit for 11 Years
	F	G
21	Rate per month (3.5%/12)	0.29167%
22	Period (NPER) (12*11)	132
23	Present Value	0
24	PMT	130
25
26	Future value	$20,894.6857
Total Deposit for 5 Years
	F	G
32	Rate per month (4.4%/12)	0.36667%
33	Period (NPER) (12*5)	60
34	Present Value	0
35	PMT	130
36
37	Future value	$8,706.7667
38
39	Future value after 16 Years (20894.6857 + 8706.6857)	$29,601.45

Interest = Total Deposit - Future value

= (130*16*12) - 29601.45

= 24960-29601.45 = 4641.45

formula:

Total Deposit for 11 Years
	F	G
21	Rate per month (3.5%/12)	=3.5%/12
22	Period (NPER) (12*11)	=12*11
23	Present Value	0
24	PMT	130
25
26	Future value	=FV(G21,G22,-G24,G23)
Total Deposit for 5 Years
	F	G
32	Rate per month (4.4%/12)	=4.4%/12
33	Period (NPER) (12*5)	=12*5
34	Present Value	0
35	PMT	130
36
37	Future value	=FV(G32,G33,-G35,G34)
38
39	Future value after 16 Years (20894.6857 + 8706.6857)	=G37+G26