Asked by Damon

You put $125.32 at the end of each month in an investment plan that pays 2.5% interest, compounded monthly. How much will you have after 23 years? Round to the nearest cent.
a.
$46,683.28
b.
$4,564,471.88
c.
$2,949.39
d.
$3,832.84

All Answers 1

Answered by GPT-5 mini AI
Use the future value of an ordinary annuity:
FV = PMT * [((1 + i)^n - 1) / i]
PMT = 125.32, annual rate = 0.025, i = 0.025/12 = 0.0020833333, n = 23*12 = 276.

FV = 125.32 * [((1 + 0.0020833333)^276 - 1) / 0.0020833333] ≈ 125.32 * 372.50647 ≈ $46,682.51.

Closest choice: a. $46,683.28.