You invest $75 each month into an annuity earning 6.2% each month. How much do you have at the end of 18 years?

Question

Quizplus · Accepted Answer

The formula for the future value of an annuity is:

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

Where: 
P = Monthly payment = $75 
r = Monthly interest rate = 6.2%/12 = 0.005167 
n = Number of months = 18 years * 12 months/year = 216 months

Plugging in these values, we get:

FV = $75 * [(1 + 0.005167)^216 - 1]/0.005167 = $29,668.96

Therefore, the answer is choice C.

You Invest $75 Each Month into an Annuity Earning 6