Question

Since your birth​, your grandparents have been depositing $100 into a savings account every month. The account pays 6​% interest annually. Immediately after your grandparents make the deposit on your 18th​ birthday, the amount of money in your savings account will be closest​ to:

Answer 1

Information provided:

Monthly deposit= $100

Interest rate= 6%/12= 0.50%

Time= 18 years*12= 216 months

The question is solved by entering the below in a financial calculator:

PMT= 100

I/Y= 0.50

N= 216

Press the CPT key and FV to calculate the amount accumulated in the account at the end of 18 years.

The value obtained is $38,735.32.

Therefore, the amount in the accumulated account at the 18 years is $38,735.32.

In case of any further queries, kindly comment on the solution.