Question

Suppose you invest $75 a month in an annuity that earns 48% APR compounded monthly. How much money will you have in this account after 3 years? 

Answer 1

Answer:

The money after 3 years is $5819.8735

Step-by-step explanation:

We are given

monthly payment =$75

so, P=75

annuity that earns 48% APR

so, r=48%

Since, it is compounded monthly

so,

$i=\frac{48}{12} =4$%

i=0.04

$n=12\times 3=36$

now, we can use annuity formula

$FV=P[\frac{(1+i)^n-1}{i} ]$

where

FV is future value

now, we can plug values

$FV=75[\frac{(1+0.04)^{36}-1}{0.04} ]$

we get

$FV=5819.8735$

The money after 3 years is $5819.8735