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You decide to reduce the amount you spend eating out by $150 a month and invest the total saved at
the end of each year in your retirement account. How much will the account be worth at 5% in 15
years? (Use Table 13.1.) (Do not round intermediate calculations. Round your answer to the
nearest cent.)

Sagot :

The type of savings is the saving of uniform amount with interest applied to the sum of the amount in the account.

  • The amount the account is worth after 15 years is approximately $38,841.1

Reasons:

The amount saved per month = $150

Amount saved per year, A = 12 × $150 = $1,800

The interest rate on the account, i = 5%

The amount, F, in the account after 15 years is given as follows;

The uniform series compound amount factor formula is presented as follows;

[tex]\displaystyle F = \mathbf{\frac{A \cdot \left[ \left(1 + i \right)^n - 1 \right]}{i}}[/tex]

Therefore;

[tex]\displaystyle F = \frac{1,800 \times \left[ \left(1 + 0.05 \right)^{15} - 1 \right]}{0.05} \approx \mathbf{38,841.4}[/tex]

The amount the account is worth after 15 years to the nearest cent is approximately $38,841.4.

Learn more about compound interest here:

https://brainly.com/question/9742437

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