Question

Find the savings plan balance after 18 months with an APR of 6% and monthly payments of 300$.The balance is $

Answer 1

Step-by-step explanation

To answer the question, we will make use of the formula

`A=P*((1+(APR)/(100n))^(n* N)-1)/(((APR)/(100n)))`

Where

`\begin{gathered} APR=6 \\ n=number\text{ of times compounded in a year=}12 \\ N=Number\text{ of years=}(18)/(12)=1.5 \\ P=300 \\ \end{gathered}`

Thus

`(APR)/(100n)=(6)/(100*12)=(1)/(200)=0.005`
`\begin{gathered} A=300*((1+0.005)^(12*1.5)-1)/(0.005) \\ \\ A=300*18.784 \\ \\ A=\text{ \$5635.20} \\ \end{gathered}`

Thus, the balance will be $5635.20