You put $125.32 at the end of each month in an investment plan that pays 2.5% interest, compounded monthly. how much will you have after 23 years? round to the nearest cent.
a. $46,683.28
b. $4,564,471.88
c. $2,949.39
d. $3,832.84

The correct option is Option A .

Further explanation:

The future value of an annuity is the total worth of annuity payments at a particular point in the future.

The formula for future value of annuity is as follows,

Here,  is the future value of annuity,  is the value of each annuity payment,  is the interest rate and  is the time in years.

If interest is compounded yearly then , if compounded semiannually then , if compounded quarterly then , if compounded month then .

Given:

It is given that the person invests  at the end of each month with  interest.

Step by step explanation:

Step 1:

The value of each annuity payment is , the interest rate is  compounded monthly and time is .

The interest rate is compounded monthly therefore the value of  is 12.

Step 2:

Now the future value of annuity can be calculated as,

Thus, the option A  is correct.

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Answer details:

Grade: High school

Subject: Mathematics

Chapter: Future value of annuity

Keywords: Interest rate, future value, annuity, payment, compounded monthly, month, investment plan, invests, person, worth, particular point.

answer: 298143

step-by-step explanation: