Question

Kennedy opens a savings account with $500. He deposits $50 every month into the account that has a 0.95% interest rate, compounded annually. If he doesn't withdraw any money, what will the account balance be in 10 years? (show work)

A= $6,263.11
B= $6,322.61
C= $6.812,69
D= $6,872.19

Answer 1

50×12=600 deposits per year
Now calculate the future value
Fv=500×(1+0.0095)^(10)+600 [((1+0.00495)^(10)-1)/(0.0095)]
Fv=6812.69