Donovan started placing $75 per month into an annuity savings plan that earned 1.5% APR compounded Monthly. The future value of his account after 10 years was $9703.52. How much of the final amount was a result of earned interest? Enter your answer without a dollar sign or comma. For example, 9703.52

1 answer

To determine how much of the final amount was a result of earned interest, we first need to calculate the total contributions made by Donovan over the 10 years.

Donovan contributes $75 per month for 10 years, so the total number of months is:

\[ 10 \text{ years} \times 12 \text{ months/year} = 120 \text{ months} \]

Next, we calculate the total contributions:

\[ \text{Total Contributions} = 75 \text{ dollars/month} \times 120 \text{ months} = 9000 \text{ dollars} \]

The future value of the account after 10 years is given as $9703.52. Now, we can find how much of the final amount is due to earned interest by subtracting the total contributions from the future value:

\[ \text{Earned Interest} = \text{Future Value} - \text{Total Contributions} \] \[ \text{Earned Interest} = 9703.52 - 9000 = 703.52 \]

Thus, the amount of the final account that was a result of earned interest is:

\[ \boxed{703.52} \]