SOLUTION: Suppose you invest $75 a month in an annuity that earns 48% APR compounded monthly. How much money will you have in this account after 3 years?
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Question 1117585: Suppose you invest $75 a month in an annuity that earns 48% APR compounded monthly. How much money will you have in this account after 3 years?
Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
Future Value of an Annuity
^n\ -\ 1}{i}\])
Where 
is the future value of the annuity, 
is the periodic payment, 
is the interest rate per period as a decimal, and 
is the number of periods. Since you are making monthly payments, there are 36 months in 3 years so 
, 48% is an annual interest rate, so the rate per period is 
, which as a decimal is 
, Hence:
^{36}\ -\ 1}{0.04}\])
The rest is just arithmetic.
John
My calculator said it, I believe it, that settles it
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