find the balance in the account after the 90th deposit if we deposit $200 at the
ID: 2818441 • Letter: F
Question
find the balance in the account after the 90th deposit if we deposit $200 at the beginning of each month and the annual interest rate is 3%with interest compounded monthly find the balance in the account after the 90th deposit if we deposit $200 at the beginning of each month and the annual interest rate is 3%with interest compounded monthly find the balance in the account after the 90th deposit if we deposit $200 at the beginning of each month and the annual interest rate is 3%with interest compounded monthlyExplanation / Answer
Future value of annuity due can be computed as:
FV = (1+r) x P x [(1+r) n – 1/r]
P = Periodic cash flow = $ 200
r = Rate per period = 3 % p.a. or 0.03/12 =0.0025
n = Numbers of periods = 90
FV = (1+0.0025) x $ 200 x [(1+0.0025)90 – 1/0.0025]
= (1.0025) x $ 200 x [(1.0025)90 – 1/0.0025]
= (1.0025) x $ 200 x [(1.251971136 – 1)/0.0025]
= (1.0025) x $ 200 x (0.251971136/0.0025)
= (1.0025) x $ 200 x 100.7884543
= $ 20,208.08508 or $ 20,208.09
Balance in the account will be $ 20,208.09 after 90th deposit.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.