Question

Find the savings plan balance after 18 months with an APR of 3% and monthly payments of $200.

Answer 1

The saving plan balance is $3,677.53.

Given that,

• The no of months is 18.
• The annual percentage rate is 3% so the monthly rate percentage is 0.25%.
• And, the monthly payment is $200.

Based on the above information, the following formula should be used:

FVA = PMT×  [(1+r)^n - 1] ÷ r

= $200 × [(1+ 0.0025)^18 - 1] ÷ 0.0025

= $3,677.53

Therefore we can conclude that the saving plan balance is $3,677.53.

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