The stated interest rate on your account is 5%,interest compounded monthly.If you deposit $50 each month,how much will you have in your account in 5 years? (Use time value tables or financial calculator.Select the closest answer.)

Question

Quizplus · Accepted Answer

To calculate the final amount after 5 years, we need to use the future value formula: FV = PMT × (((1 + r/n)^(n*t)) - 1) / (r/n), where PMT is the monthly deposit amount, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years. Plugging in our values, we get FV = 50 × (((1 + 0.05/12)^(12*5)) - 1) / (0.05/12) = $3,397.89, which is closest to option D, $3,400.

The Stated Interest Rate on Your Account Is 5%,interest Compounded