Question

Your parents are giving you $190 a month for 4 years while you are in college. At an interest rate of .45 percent per month, what are these payments worth to you when you first start college?

Answer 1

Answer:

Amount $= 2827.2$ dollars

Explanation:

Given

principal amount per month $= 190$

Total time period $= 4$ years $= 48$ months

Monthly rate of interest $= 0.45$

As we know that

$A = P * (1+ \frac{r}{n}) ^{nt}$

Where A is the amount

P is the principal amount

r is the rate of interest

n is the number of times interest applied over the total time period

t is the total time period

Substituting the given values in above equation, we get -

$A = (190 * 12) * ( 1 + 0 .0045)^{48}\\A = 2280 * 1.24\\A = 2827.2$