Jaya deposits $820 every month into an account earning an annual interest rate of 5.7% compounded monthly. How much would she have in the account after 9 years, to the nearest dollar? Use the following formula to determine your answer.
The formula to calculate the future value of an account with regular monthly deposits and compound interest is:
FV = Pmt * (((1 + r/n)^nt - 1) / (r/n)) + Pmt * ((1 + r/n)^(nt))
where:
FV = Future Value
Pmt = Monthly Deposit (in this case, $820)
r = Annual Interest Rate (in this case, 5.7% or 0.057)
n = Number of compounding periods per year (in this case, monthly, so n = 12)
t = Number of years the money is invested for (in this case, 9 years)
Plugging in the values:
FV = $820 * (((1 + 0.057/12)^(12*9) - 1)/(0.057/12)) + $820 * ((1 + 0.057/12)^(12*9))
After calculating this, the approximate answer is $112,140.