Question

How much will you have at the end of 5 years in a European vacation account if you deposit $200 a month in an account that is paying a nominal 12 percent per year, compounded monthly

Answer 1

Answer:

The final value is $16,333.93

Explanation:

Giving the following information:

You deposit $200 a month for 5 years on an account with an annual interest rate of 12% compounded monthly.

First, we need to calculate the monthly interest rate:

Interest rate= 0.12/12= 0.01

Now, we can calculate the future value using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit= 200

i= 0.01

n= 5*12= 60

FV= {200*[(1.01^60)-1]}/ 0.01= $16,333.93