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Recently, More Money 4U offered an annuity that pays 4.5% compounded monthly If $1,869 is deposited into this annuity overy month, how much is in the account after 4 years? How much of this is interest?Type the amount in the accounts(Round to the nearest dollar)

Respuesta :

Given:

More Money 4U offered an annuity that pays 4.5% compounded monthly

so, the interest rate = r = 4.5% = 0.045, and n = 12

If $1,869 is deposited into this annuity every month

so, the value of P = 1869

we will use the following formula:

[tex]A=\frac{P((1+\frac{r}{n})^{nt}-1)}{\frac{r}{n}}[/tex]

We will find the value of A after 4 years, t = 4

So, substitute P = 1869, r = 0.045, t = 4, n = 12

[tex]A=\frac{1869\cdot((1+\frac{0.045}{12})^{12\cdot4}-1)}{\frac{0.045}{12}}\approx1869\cdot52.48=98,092.285[/tex]

Rounding to the nearest dollar

So, the answer will be the balance of the account = $98,092

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