Question

MY NOTES Suppose a recent college graduate's first job allows her to deposit $250 at the end of each month in a savings plan that earns 6%, compounded monthly. This savings plan continues for 9 years before new obligations make it impossible to continue. How much money has accrued in the account at the end of the 9 years? (Round your answer to the nearest cent.) $ If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals, how much money will be in the account 24 years after the plan began? (Round your answer to the nearest cent.) $

Answer 1

How much money has accrued in the account at the end of the 9 years? (Round your answer to the nearest cent.)

Future Value at end of Year 9 = Monthly Deposit * FVAF(0.50%,108)

Future Value at end of Year 9 = 250 * 142.7399

Future Value at end of Year 9 = $35684.97

If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals, how much money will be in the account 24 years after the plan began? (Round your answer to the nearest cent.)

Money in account after 24 years = Future Value at year 9 * (1 + Interest per month)^total periods

Money in account after 24 years = $35684.97 * (1 + 0.50%)^180

Money in account after 24 years = $35684.97 * 2.4540936

Money in account after 24 years = $87574.27

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