Question

Diane contributes $625 at the end of each month to retirement fund. For the past 10 years this fund has earned 3.84% a year. Compounded monthly, assuming the 3.84% rates continue, how much will she have in her retirement account after 15 years?

Answer 1

Using the formula below, where r is the annual interest rate, with n periods per year for t years,

F = P((1+i/n)^(nt)-1)/(i/n) we have
= 625((1+.0384/12)^(12*15)-1)/(.0384/12)
= 151,811.20