Answer:
Step-by-step explanation:
Annual interest rate is 2.75%. Hence, the monthly interest rate is [tex]\frac{2.75}{12}[/tex]
The amount will be compounded [tex](20\times12) = 240[/tex] times.
Every month they deposits $500.
In the first month that deposited $500 will be compounded 240 times.
It will be [tex]500\times [1 + \frac{2.75}{1200} ]^{240}[/tex]
In the second month $500 will be deposited again, this time it will be compounded 239 times.
It will give [tex]500\times [1 + \frac{2.75}{1200} ]^{239}[/tex]
Hence, the total after 20 years will be [tex]500\times [1 + \frac{2.75}{1200} ]^{240} + 500\times [1 + \frac{2.75}{1200} ]^{239} + ........+ 500\times [1 + \frac{2.75}{1200} ]^{1} = 160110.6741[/tex]
