You are considering investing in a Third World bank account that pays a nominal annual rate of 18%, compounded MONTHLY. If you invest $5,000 at the BEGINNING of each month, how many months will it take for your account to grow to $250,000? Round fractional years up.
A) 23
B) 27
C) 32
D) 38

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used to calculate the number of months needed. With a monthly interest rate of 1.5% (18%/12), and monthly deposits of $5,000, it takes 38 months for the account to reach $250,000.

You Are Considering Investing in a Third World Bank Account