Question

You are planning to make monthly deposits of $370 into a retirement account that pays 9 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 35 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer: $

1,088,460.76

Explanation: The other person who commented was on the right track, but is incorrect. The correct answer is $1,088,460.76.

Answer 2

Final Value= $733,755

Step-by-step explanation:

Giving the following information:

You are planning to make monthly deposits of $370 into a retirement account that pays 9 percent interest compounded monthly. Your retirement is in 35 years.

Effective rate= 0.09/12= 0.0075

n= 35*12= 420

A= monthly deposit= 370

We need to use the following formula of Final Value:

FV= {A*[(1+i)^n-1]}/i

FV= {370*[(1.0075^370)-1]}/0.0075= $733,755