Solve.
-Lonnie deposits $150 each month into an account paying annual interest of 7% compounded monthly.How much will his account have in it at the end of 14 years?
A)$42,606
B)$3,383
C)$42,452
D)$42,735

Question

Quizplus · Accepted Answer

The account balance can be calculated using the formula for the future value of a series: $FV = P \times \frac{(1 + r)^n - 1}{r}$, where $P$ is the monthly deposit, $r$ is the monthly interest rate (annual rate divided by 12), and $n$ is the total number of deposits (months). Here, $P = $150$, $r = 0.07/12$, and $n = 14 \times 12$. Plugging these values into the formula gives the future value, which matches choice A, $42,606.

Solve. -Lonnie Deposits $150 Each Month into an Account Paying Annual