A deposit of $400 at the end of each month invested at 6% compounded monthly will grow to$277,198 in 25 years.

Question

Quizplus · Accepted Answer

This can be solved using the formula for future value of an annuity:

FV = Pmt*((1+r)^n - 1)/r

where FV is the future value, Pmt is the periodic payment, r is the interest rate per period, and n is the number of periods.

Plugging in the given values, we get:

FV = 400*((1+0.06/12)^(25*12) - 1)/(0.06/12) = $277,198.07

Therefore, the statement is true.

A Deposit of $400 at the End of Each Month