Question

assume you pay 300 per month into a retirement account for 12 years and they count has an APR of 3.05 compounded monthly question what is the account balance at the end of the 12 years round to the nearest cent

Answer 1

Given:

$300 per month in 12 years.

1 year = 12 months = 300 x 12 = $3600

For 12 years = $3600 x 12 = $43 200

Principal (P) = $43 200

rate(r) = 3.05% = 0.0305

Time (t) =12

n = 12

Using the formula below:

$A=P(1+\frac{r}{n})^{nt}$

Substitute into the formula and evaluate

$A=43200(1+\frac{0.0305}{12})^{12\times12}$

$=43200(1+0.00254166667)^{144}$$=43200(1.00254166667)^{144}$$\approx62263.55$

Therefore, the account balance at the end of the 12 years is $62263.55