According to the Question, We are given,
An individual invests $250/m for 30 years at an expected rate of return of 8 percent.
To Calculate the Future Value,
<h3><u>SOLUTION</u></h3>
Here, the deposits will be same every month, so it is an annuity. We will use the following future value of annuity formula:
FVA = P × ((1 + r)ⁿ - 1 / r)
where, FVA is future value of annuity,
P is the periodical amount = $250,
r is the rate of interest = 8% pa,
so monthly rate = 8% / 12 = 0.67%
and n is the time period = 30 × 12 = 360 months
Now, putting these values in the above formula, we get,
FVA = $250 × ((1 + 0.6667%)360 - 1 / 0.6667%)
FVA = $250 × ((1 + 0.006667)360 - 1 / 0.006667)
FVA = $250 × ((1.006667)360 - 1 / 0.006667)
FVA = $250 × ((10.9357296578 - 1 / 0.006667)
FVA = $250 × (9.9357296578 / 0.006667)
FVA = $250 × 1490.28493442
FVA = $372571.23
So, future value is $372571.23
To know more about Future Value, check the given links.
brainly.com/question/24703884
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