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10 November, 00:17

You plan to save $370 per month starting today for the next 46 years "just to start the month off right." You feel that you can earn an interest rate of 9.7 percent compounded monthly. How much will there be in the account 46 years from today

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  1. 10 November, 00:23
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    You plan to save $370 per month starting today for the next 46 years at an interest rate of 9.7% will be $791046.3155

    Explanation:

    Rate = 9.7% / 12 = 0.808333%

    Number of periods = 30 * 12 = 360

    Future value = (1 + r) * Monthly payments * [ (1 + r) n - 1] / r

    Future value = (1 + 0.00808333) * 370 * [ (1 + 0.00808333) 360 - 1] / 0.00808333

    Future value = 1.00808333 * 370 * 2,120.819723

    Future value = $791046.3155
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