Question

Find the savings plan balance after 6 months with an APR of 2% and monthly payments of $250

Answer 1

The savings plan balance is $2700

Explanation:

Given:

Time, t = 6 months

APR = 2%

Monthly payment, PMT = $250

Savings plan, A = ?

We know,

$A = PMT X \frac{[(1 + \frac{APR}{n})^n^Y - 1 }{\frac{APR}{n} }$

Substituting the value in the equation we get,

$A = 250 X \frac{[(1 + \frac{0.02}{6})^8 - 1] }{\frac{0.02}{8} } \\\\A = 250 X \frac{0.027}{0.0025} \\\\A = 2700$

Therefore, the savings plan balance is $2700