Since your first birthday, your grandparents have been depositing $100 into a savings account every month. The account pays 4% interest annually. Immediately after your grandparents make the deposit on your 18th birthday, the amount of money in your savings account will be closest to:

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used to calculate the total amount: FV = P * [((1 + r)^nt - 1) / r], where P is the monthly deposit ($100), r is the monthly interest rate (0.04/12), n is the number of times the interest is compounded per year (12), and t is the number of years (18). Calculating this gives an amount closest to $31,559.

Since Your First Birthday, Your Grandparents Have Been Depositing $100