Find the savings plan balance after 3 years with an APR of % 3 and monthly payments of $150
To find the savings plan balance after 3 years with an APR (Annual Percentage Rate) of 3% and monthly payments of $150, we need to use the formula for calculating the future value of an ordinary annuity.
The formula is:
FV = P * ((1 + r)^n - 1) / r
Where:
FV = Future Value
P = Monthly Payment
r = Monthly interest rate (APR / 12)
n = Number of periods (in this case, 3 years * 12 months/year)
First, let's calculate the monthly interest rate (r):
r = 3% / 12 = 0.03 / 12 = 0.0025
Next, calculate the number of periods (n):
n = 3 years * 12 months/year = 36 months
Now, substitute the values into the formula:
FV = $150 * ((1 + 0.0025)^36 - 1) / 0.0025
Calculating this out:
FV = $150 * (1.0025^36 - 1) / 0.0025
FV = $150 * (1.090847479 - 1) / 0.0025
FV = $150 * (0.090847479) / 0.0025
FV = $150 * 36.338992714
FV = $5,450.84
Therefore, after 3 years with an APR of 3% and monthly payments of $150, the savings plan balance would be approximately $5,450.84.