Homework Answers
Answer 1
Formula :
Future value of periodic deposit is given by :
FV = (P/r)((1 + r)n - 1)
where n = number of periods = Total number of months = 21*12 = 252 , r = interest rate of a period = interest rate of a month = (8/12)% = 8/1200, P = periodic payment = periodic deposit = 103, FV = Future Value after 21 years that we have to calculate.
=> FV = (103/(8/1200))((1 + 8/1200)252 - 1) = 66986.95
Hence At the end of 21 years Ethel will have $66986.95 in her account
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