You begin making monthly deposits of $400 on June 3,2007 in a fund earning j₁₂ = 9%.How much do you have in the fund immediately after the deposit on October 3,2010? A)$19,661.32 B)$19,117.93 C)$18,578.59 D)$14,073.23

Question

Quizplus · Accepted Answer

The fund earns interest compounded monthly at an effective monthly rate of 0.75% (9% annual rate divided by 12 months). The deposits are made for 40 months (from June 2007 to October 2010). Using the future value of an annuity formula, the amount in the fund is calculated as $19,117.93.

You Begin Making Monthly Deposits of $400 on June 3,2007