Your bank offers you a savings account which pays nominal interest of 5% per ann

Question

Your bank offers you a savings account which pays nominal interest of 5% per annum, compounded monthly. Currently, the balance on this account is $0. If you were to begin making deposits of $300 to this account each month, with the first deposit occurring one month from now, then what will the balance on this account be exactly 16 years from now? Answer $87,973 $65,703 $103,680 $87,909 $72,247 Your bank offers you a savings account which pays nominal interest of 5% per annum, compounded monthly. Currently, the balance on this account is $0. If you were to begin making deposits of $300 to this account each month, with the first deposit occurring one month from now, then what will the balance on this account be exactly 16 years from now? Your bank offers you a savings account which pays nominal interest of 5% per annum, compounded monthly. Currently, the balance on this account is $0. If you were to begin making deposits of $300 to this account each month, with the first deposit occurring one month from now, then what will the balance on this account be exactly 16 years from now? $87,973 $65,703 $103,680 $87,909 $72,247 $87,973 $65,703 $103,680 $87,909 $72,247

Explanation / Answer

Saving Int rate = 5% monthly compnfdng.

So Rate = 5%/12

Monthy payment =PMT=300

Tenure = nper = 16Yr*12mon/Yr = 16*12

So Maturity Value = FV(Rate,nper,pmt,pv)

= FV(5%/12,16*12,300,0) = $87,973

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