Monthly deposits of $800 are made into a fund starting today,April 14,2006 and continuing until July 14,2008.The fund earns j₁₂ = 6%.What is the accumulated value of these deposits on July 14,2008?

Question

Quizplus · Accepted Answer

To find the accumulated value of the deposits, we need to use the formula for compound interest:

A = P(1+r/n)^(nt)

Where:
A = accumulated value
P = principal (initial deposit)
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = time (in years)

In this case, we have monthly deposits of $800, so P = $800 and n = 12. The interest rate is 6%, or r = 0.06. The time is from April 14, 2006 to July 14, 2008, which is 27 months, or t = 27/12 = 2.25.

Using these values, we can calculate the accumulated value:

A = $800(1+0.06/12)^(12*2.25) = $23,979.62

Therefore, the best choice is C as it matches the calculated value.

Monthly Deposits of $800 Are Made into a Fund Starting