+0  
 
0
140
6
avatar+32 

Veronica plans to make a $95 a month annuity payment to an account that earns 3% annual interest to build up her savings. How much can she save in 10 years with this plan?

A. $7,122.49

B. $13,275.43

C. $21,846.27

D. $38,960.76..

I think the answer is D but I'm not very good at this stuff... Please help it's URGENT!!!

 Mar 20, 2020
 #1
avatar+1956 
+1

Hint:

 

Since Veronica earns 3% or 0.03 annual (per year) interest, the amount she earns in ten years will be (0.03)^10.


We can easily write an equation that shows how much Veronica wants to earn.

 

Hope this helped!

 Mar 20, 2020
 #2
avatar+32 
+1

this doesn't help... I don't under stand

Roses  Mar 20, 2020
 #3
avatar+23566 
+2

For payments made at the BEGINNING OF THE MONTH   (payment due annuity)

 

    ​P=PMT×((1+r)n−1)/r  ​×  (1+r)​

 

For payments made at the END OF THE MONTH (ordinary annuity....more common)

   P =PMT X ((1+r)n  -1)/r       I'll use this one

        PMT = 95      r = 3%/12months = .0025 % per month      n = 10 years * 12 months/year  = 120 months

 

 P = 95 ( ( 1+.0025)120 -1 ) / .0025   =  $ 13 275.43

 Mar 20, 2020
 #4
avatar+32 
+1

thank you for breaking that down that really helped me understand it... I have a lot of trouble with this stuff.. I really appreciate it.

Roses  Mar 20, 2020
 #5
avatar+23566 
+1

You're welcome !!   cheeky     I HOPE you understand it !

ElectricPavlov  Mar 20, 2020
 #6
avatar+109509 
0

Hi Roses, welcome to web2calc forum   laugh

 Mar 21, 2020

11 Online Users

avatar
avatar
avatar
avatar