Question

ou make $6,900 annual deposits into a retirement account that pays an APR of 11.2 percent compounded monthly.

How large will your account balance be in 32 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Convert APR to EAR = [ (1+11.2% / 12)¹² -1)] = 11.79%

Amount in 32 years = Annuity * ( 1+ EAR) ⁿ -1) /r

= 6900* ( 1+ 11.79%) ³²-1) /11.79%

= 2,014,065.30