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If Jackson deposits $50 at the end of each month in a savings account earning interest...

If Jackson deposits $50 at the end of each month in a savings account earning interest at a rate of 3%/year compounded monthly, how much will he have on deposit in his savings account at the end of 3 years, assuming he makes no withdrawals during that period? (Round your answer to the nearest cent.)

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Answer #1

We can use the future value of annuity formula to find the answer:

Where,
FVA = Future Value of Annuity
A = Annuity or monthly payment
i = rate of interest
n = number of years
a = number of payments in a year

Therefore, at the end of 3 years, he will have $1881.03 in his savings account.

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