Answer :
Answer:
$9784
Step-by-step explanation:
Annuity Future Value Formula
A formula can be used to calculate the value of an account that grows off of compound interest when recurring payments are made (assuming) at the end of each month.
[tex]FV = P \times \dfrac{\left(1+\dfrac{r}{n}\right)^{nt}-1}{\dfrac{r}{n}}[/tex]
where
- P is the value of the recurring payments
- r is the rate of the compound interest (decimal form)
- n is the number of times interest is compounded per year
- t is the time that elapses in years
- FV is the value of the account after t years.
[tex]\hrulefill[/tex]
Solving the Problem
We're told
- r = 0.045 (4.5%)
- P = $320
- the payments are made on a monthly basis
- t= 29/12
- n = 12
So,
[tex]FV = (320) \times \dfrac{\left(1+\dfrac{0.045}{12}\right)^{(12)(\frac{29}{12}) }-1}{\dfrac{0.045}{12}}[/tex]
[tex]FV = 9784[/tex]
.
