James and Terry open a savings account that has a 2.75% annual interes

1.	James and Terry open a savings account that has a 2.75% annual interest rate, compounded monthly. They deposit $400 into the account each month. How much will be in the account after 20 years
Answer» Use FV = (P(1+r/n)^(nt)-1)/(r/n), where FV = future value, P = amount deposited monthly, r = interest rate (%/100), n=12 (compounded monthly), t = 20 years FV = (400(1 + .0275/12)^(20*12)-1)/(.0275/12) = $302124.4

James and Terry open a savings account that has a 2.75% annual interest rate, compounded monthly. They deposit $400 into the account each month. How much will be in the account after 20 years

Answer»

Use FV = (P(1+r/n)^(nt)-1)/(r/n),

where FV = future value, P = amount deposited monthly, r = interest rate (%/100),

n=12 (compounded monthly), t = 20 years

FV = (400(1 + .0275/12)^(20*12)-1)/(.0275/12) = $302124.4