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5 April, 15:37

How much will you have at the end of 5 years in a European vacation account if you deposit $200 a month in an account that is paying a nominal 12 percent per year, compounded monthly

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  1. 5 April, 15:44
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    The final value is $16,333.93

    Explanation:

    Giving the following information:

    You deposit $200 a month for 5 years on an account with an annual interest rate of 12% compounded monthly.

    First, we need to calculate the monthly interest rate:

    Interest rate = 0.12/12 = 0.01

    Now, we can calculate the future value using the following formula:

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

    A = monthly deposit = 200

    i = 0.01

    n = 5*12 = 60

    FV = {200*[ (1.01^60) - 1]} / 0.01 = $16,333.93
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