Question

Find the savings plan balance after 3 years with an APR of 7​% and monthly payments of ​$150.

Answer 1

Answer:

The balance is $5989.5

Step-by-step explanation:

The savings plan balance is given by the following formula:

$A = P*\left[\frac{(1 + \frac{APR}{n})^{n*Y} - 1}{\frac{APR}{n}}\right]$

In which A is the savings plan balance, P is the monthly payment, APR is the annual percentage rate(decimal), n is the number of payments per year and Y is the number of years.

In this problem, we have that

Find the savings plan balance after 3 years with an APR of 7​% and monthly payments of ​$150.

So we have to find A when $P = 150, APR = 0.07, n = 12, Y = 3$.

So

$A = P*\left[\frac{(1 + \frac{APR}{n})^{n*Y} - 1}{\frac{APR}{n}}\right]$

$A = 150*\left[\frac{(1 + \frac{0.07}{12})^{12*3} - 1}{\frac{0.07}{12}}\right]$

$A = 5989.5$

The balance is $5989.5