The future value of an account earning monthly payments of $25 at a variable annual interest rate cannot be calculated using the future value of an annuity formula because the formula assumes a constant interest rate, while a variable interest rate fluctuates over time, requiring a more complex calculation for accurate future value assessment.
In 1–2 sentences, explain why the future value of an account that earns monthly payments of $25 at a variable annual interest rate for 36 months cannot be calculated by using the formula for the future value of an annuity.
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