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11 June, 04:45

Jennifer wants to take a trip around the world. She plans to deposit $125 at the beginning of each month into an investment with a 3.75 interest rate, compounded monthly. How much will she have in the account in 8 years?

A. 13, 969.10

B. 14, 012.75

C. 110, 885.27

D. 115, 043.47

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Answers (2)
  1. 11 June, 07:59
    0
    The answer to that is 14012.75
  2. 11 June, 08:18
    0
    The formula of the future value of annuity due is

    A=p [ (1+r/k) ^ (kn) - 1) / (r/k) ] * (1+r/k)

    A future value of annuity due

    P payment 125

    R interest rate 0.0375

    K compounded monthly 12

    N time 8 years

    Solve for A

    A=125 * (((1+0.0375:12) ^ (12

    *8) - 1) : (0.0375:12)) * (1

    +0.0375:12)

    =14,012.75
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