Question

You have decided to place $361 in equal deposits every month at the beginning of the...

You have decided to place $361 in equal deposits every month at the beginning of the month into a savings account earning 4.63 percent per year, compounded monthly for the next 5 years. The first deposit is made today. How much money will be in the account at the end of that time period? Round the answer to two decimal places.

Homework Answers

Answer #1
Future Value of an Annuity Due
= C*[(1+i)^n-1]/i] * (1+i)
Where,
c= Cash Flow per period
i = interest rate per period =4.63%/12 =0.385833333%
n=number of period =5*12=60
= $361[ (1+0.00385833333)^60 -1 /0.00385833333] * (1 +0.00385833333)
= $361[ (1.00385833333)^60 -1 /0.00385833333] * 1.00385833333
= $361[ (1.2599 -1 /0.00385833333] * 1.00385833333
= $24,413.66
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