Veronica plans to make a $95 a month annuity payment to an account that earns 3% annual interest to build up her savings. How mu
ch can she save in 10 years with this plan?
A 7,122.49
B 13,275.43
C 21,846.27
D 38,960.76
1 answer:
Answer:
A. 13,275.43
Step-by-step explanation:
Given the principal as $95, annual rate as 3% and term of the annuity as10yrs/
#First we determine the effective rate per payment period
# Annuity formula is given as:
![A=P[{\frac{(1+i)^n-1)}{i}}], \ i=0.0025, n=12\times10=120,p=95\\\\A=95[{\frac{(1.0025)^{120}-1)}{0.0025}}]\\\\A=13275.43](https://tex.z-dn.net/?f=A%3DP%5B%7B%5Cfrac%7B%281%2Bi%29%5En-1%29%7D%7Bi%7D%7D%5D%2C%20%5C%20i%3D0.0025%2C%20n%3D12%5Ctimes10%3D120%2Cp%3D95%5C%5C%5C%5CA%3D95%5B%7B%5Cfrac%7B%281.0025%29%5E%7B120%7D-1%29%7D%7B0.0025%7D%7D%5D%5C%5C%5C%5CA%3D13275.43)
Hence, Veronica needs to save $13,275.43
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I belive the answer would be B if not im sorry
