Find the future value of an annuity with monthly deposits of $150, made over a period of 10 years, with 5% interest compounded monthly.
A) $13,721
B) $23,205
C) $23,292
D) $30,707

Question

Quizplus · Accepted Answer

First, we need to calculate the total number of months in 10 years, which will be 10 x 12 = 120 months.

Using the formula for future value of an annuity, which is:

FV = PMT x (((1 + r)^n - 1) / r)

Where:
PMT = the monthly deposit amount
r = the interest rate per month
n = the total number of months

FV = $150 x (((1 + 0.05/12)^120 - 1) / (0.05/12))
FV = $23,292.11

Therefore, the correct answer is choice C, $23,292.

Find the Future Value of an Annuity with Monthly Deposits