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What is the future value of the 10% savings from earnings of $187.45 if it earns 5% annual interest, compounded monthly for 30 years? Use the compound interest formula to estimate the present value.

Respuesta :

DizzyBerco

Answer:

$83.75

Step-by-step explanation:

To find the future value, we first need to define our variables.

P = 187.45 x 0.10 = 18.745

r = 5% or 0.05

t = 30 years

n = 12

Now we can use the formula:

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

[tex]A=18.745(1+\dfrac{0.05}{12})^{12(30)}[/tex]

[tex]A=18.745(1+\dfrac{0.05}{12})^{360}[/tex]

[tex]A=83.75[/tex]

So the future value after 30 years is $83.75.

abiolataiwo2015

The  future value of the 10% savings from earnings of $187.45 is $83.75.

Future value

Principal= 187.45 x 0.10 = 18.745

rate = 5%

time = 30 years

n = 12

Hence:

Future value=18.745 (1+0.05/12)^30×12

Future value=18.745 (1.05/12)^360

Future value=$83.75

Inconclusion the  future value of the 10% savings from earnings of $187.45 is $83.75.

Learn more about future value here:https://brainly.com/question/24703884

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