If Jackson deposited $400 at the end of each month in the saving account earing interest at the rate of 6%/year compounded monthly, how much will he have on deposite in his savings account at the end of 6 years, assuming that he makes no withdrawals during that period? Round your answers to two decimal places.
A) $34,563.54
B) $34,541.61
C) $34,490.17
D) $34,538.54
E) $34,463.31

Question

If Jackson deposited $400 at the end of each month in the saving account earing interest at the rate of 6%/year compounded monthly, how much will he have on deposite in his savings account at the end of 6 years, assuming that he makes no withdrawals during that period? Round your answers to two decimal places. ​
A) $34,563.54
B) $34,541.61
C) $34,490.17
D) $34,538.54
E) $34,463.31

Quizplus · Accepted Answer

The correct answer is A because the future value of an annuity is calculated using the formula FV = P * ((1 + r/n)^(n*t) - 1) / (r/n), where P is the periodic payment, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years. In this case, P = $400, r = 6%, n = 12 (since interest is compounded monthly), and t = 6. Plugging these values into the formula, we get FV = $34,563.54.

If Jackson Deposited $400 at the End of Each Month