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An individual contributes $100 per month to a 401(k) retirement account. The account earns interest at a nominal annual interest rate of 8%, with interest being credited monthly. What is the value of the account after 35 years?

Respuesta :

Answer:

$458,822

Explanation:

The formula to compute the future value is shown below:

Future value = Amount (1+i)^n -1 ÷ i)

where,

Interest rate = 8% ÷ 12 months = 0.6666%

And, the number of months = 35 years × 12 months = 420

Now put this value to the above formula

F = $100 × (1 + 0.6666%)^420 - 1 ÷ 0.6666%

After solving this,

the answer would be $458,822

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