Ou make $9,300 annual deposits into a retirement account that pays an APR of 9.9 percent compounded monthly. How large will your account balance be in 30 years

Acct. Balance in 30 years.

F = $1637953.99

Explanation:

EAR =[ (1 + (r/n) )^n] -1

Where EAR = effective annual rate

r = rate = 9.9% = 0.099

n = 12 monthly compounding interest

So therefore:

EAR = (1 + (.099/12))¹² - 1 = 0.1036 =10.36%

To calculate how large the acct. Balance will be , we have

F = A*[((1 + i)^n) - 1)/i]

Where f = future value of investment.

A = annual investment value = 9300

i = EAR = .1036

n = 30

F = 9300 * [ ((1 + 0.1036)^30 - 1)/ 0.1036]

F = $1637953.99

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