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PLEASE TELL ME HOW YOU GET THE ANSWERS...PLEASE PROVIDE FORMULAS...THANK YOU!

You are planning to make monthly deposits of $330 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 25 years? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

You are planning to make monthly deposits of $330 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 25 years? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Answer:

Future value of the annuity deposit = Annuity{(1+r/n)n*no of years-1}/(r/n),

where r = rate of interest per annum, n =frequency of compounding

= $330* [{(1+0.08/12)12*25 - 1}/(0.08/12)] = $330*951.026 = $313,838.71 (ans)

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