Answered

Welcome to Westonci.ca, where curiosity meets expertise. Ask any question and receive fast, accurate answers from our knowledgeable community. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

Suppose Skyler invests in an annuity that pays 3.2% annual interest, compounded monthly. If she contributes $155 every month for 10 years, how much interest would she earn during that time

Sagot :

Parrain

Answer: $3,286.47

Explanation:

Find the future value of the annuity after 10 years.

Number of periods = 10 * 12 months = 120 months

Interest = 3.2% / 12 = 3.2/12%

Future value of annuity = Annuity * ( (1 + rate)^ number of periods- 1) / rate

= 155 * ( ( 1 + 3.2%/12) ¹²⁰- 1) / 3.2%/12

= $21,886.47

The find the amount that the money would have come to without being invested:

= 155 * 120 months

= $18,600

Interest is:

= 21,886.47 - 18,600

= $3,286.47

Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.