Calculate the accumulated value of monthly payments of $100.00 made at the end of each month for ten years just after the last payment has been made if interest is 12% p.a. compounded monthly.
A) $23 003.87
B) $33 003.87
C) $12 000
D) $1 046.22
E) $330 003.87

Question

Quizplus · Accepted Answer

We can use the formula for Future Value of an Annuity:

FV = C * [(1 + r)^n - 1] / r

Where:
C = Monthly payment = $100
r = Interest rate per period = 12% / 12 = 1% per month
n = Number of periods = 10 years * 12 months/year = 120

Plugging in the values, we get:

FV = 100 * [(1 + 0.01)^120 - 1] / 0.01
   = $23 003.87

Therefore, the accumulated value of the monthly payments is $23 003.87.

Choice A is the correct answer.

Calculate the Accumulated Value of Monthly Payments of $100