Question

You open a brand-new savings account January 1, 2021. Every paycheck you earn you deposit $25 into a savings account, and you never make any withdrawals from this account. Your savings account makes 0.01% interest and is compounded monthly. Assuming you get paid every two weeks (twice a month) how much money will you have at the end of the year?

Answer 1

The amount of money that you will have at the end of the year from your brand-new savings account is $600.69.

What is future value?

The future value is the value of periodic cash flows in the future.  It can be computed using an online finance calculator as follows:

Data and Calculations:

N (# of periods) = 24 (12 X 2)

I/Y (Interest per year) = 0.12% (0.01% X 12)

PV (Present Value) = $0

PMT (Periodic Payment) = $25

Results:

FV = $600.69

Sum of all periodic payments = $600.00 ($25 X 24)

Total Interest = $0.69

Thus, the amount of money that you will have at the end of the year from your brand-new savings account is $600.69.

Learn more about future values at brainly.com/question/24703884