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16 December, 11:45

Kennedy opens a savings account with $500. He deposits $50 every month into the account that has a 0.95% interest rate, compounded annually. If he doesn't withdraw any money, what will the account balance be in 10 years? (show work)

A = $6,263.11

B = $6,322.61

C = $6.812,69

D = $6,872.19

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Answers (1)
  1. 16 December, 13:25
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    50*12=600 deposits per year

    Now calculate the future value

    Fv=500 * (1+0.0095) ^ (10) + 600 [ ((1+0.00495) ^ (10) - 1) / (0.0095) ]

    Fv=6812.69
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