Question

Kelly Malone plans to have $51 withheld from her monthly paycheck and deposited in a savings account that earns 12% annually, compounded monthly. If Malone continues with her plan for one and one-half years, how much will be accumulated in the account on the date of the last deposit

Answer 1

Answer:

$1,774.2

Explanation:

Compute the accumulated amount in the account on the date of last deposit'

Formula used to find out the future value ordinary annuity is:

Future value factor of ordinary annuity $(FVF-0A =_{n,i} ) = \frac{1-(1+i^)^ {n} }{i}$

1- oily Future value of ordinary annuity $(FV-OA) = R (FVF-0A_{n,i} )$

Where:

R = annual return (ordinary annuity)

$(FVF-0A_{n,i} )$ = future value of an ordinary annuity of I for n periods at i interest

Substituting the values:

Future value of ordinary annuity $(FV-OA) = R (FVF-0A_{n,i} )$

                                                             = $50 (FVF-OA 12_{2.5X 12\frac{12}{12} } )$

                                                              =$50 X 34.7849$

$51 X 34.7849\\=1,774$