SOLUTION: I have always have problems figuring interst questions. Help! The parents of a newborn daughter open an annuity making $30 payments each month for their daughters college fund.

Question 64441This question is from textbook college algebra
: I have always have problems figuring interst questions. Help!
The parents of a newborn daughter open an annuity making $30 payments each month for their daughters college fund. The annuity pays an annual rate of 5% compounded monthly. Find the amount, to the nearest cent, in the annuity when their daughter turns 19.
thank you! This question is from textbook college algebra

Found 2 solutions by stanbon, josmiceli:
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
The parents of a newborn daughter open an annuity making $30 payments each month for their daughters college fund. The annuity pays an annual rate of 5% compounded monthly. Find the amount, to the nearest cent, in the annuity when their daughter turns 19.
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Formula:
Future Value of an annuity:
S=R[(1+i)^n-1]/i
S=30[(1+0.05/12)^(12*19)]/[0.05/12]
S=30[2.580611313]/[0.004]
S=30*619.3467
S=$18580.40
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Cheers,
Stan H.
Answer by josmiceli(19441) (Show Source): You can put this solution on YOUR website!
If I have the right formula, this is my solution

FVA = future value of annuity
A = value of payments made each period
r = interest rate compounded for each period
n = number of payment periods

The amount of the annuity when their daughter
turns 19 is $4064.43

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