Suppose that you wish to save for your child's university education by opening up an educational Savings account.You plan to deposit $100 per month into the account for the next 18 years.Assume that you will be able to earn 10%,compounded monthly,on your investment.How much will you have accumulated at the end of 18 years?
A)$21,600
B)$54,719
C)$33,548
D)$85,920
E)$60,056

Question

Quizplus · Accepted Answer

The future value of a series of monthly deposits can be calculated using the future value of an annuity formula: FV = P * [(1 + r)^nt - 1] / r, where P is the monthly deposit, r is the monthly interest rate, n is the number of times the interest is compounded per year, and t is the number of years. Here, P = $100, r = 0.10/12, n = 12, and t = 18. Plugging in these values gives approximately $60,056.

Suppose That You Wish to Save for Your Child's University