If you save $350 per month in an account paying 2.75% interest compounded monthly, how much will you have in that account 12 years later?
A) $57,842.75
B) $58,952.45
C) $59,631.31
D) $60,412.54

Question

Quizplus · Accepted Answer

We can use the formula for compound interest to solve this problem:

FV = PV(1+r/n)^(nt)

Where:
FV = future value (what we want to find)
PV = present value (how much we start with, in this case $0)
r = annual interest rate (2.75%)
n = number of times interest is compounded per year (12 for monthly)
t = time in years (12)

Plugging in these values, we get:

FV = 0(1+0.0275/12)^(12*12) + (350*(((1+0.0275/12)^(12*12)-1)/(0.0275/12)))
FV ≈ $59,631.31

Therefore, the best choice is C, which is closest to our calculated answer.

If You Save $350 Per Month in an Account Paying