Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example 1.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $110 deposited monthly for 20 years at 3% per year in an account containing $12,000 at the start Need Help? Read It Master It
Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example 1.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $110 deposited monthly for 20 years at 3% per year in an account containing $12,000 at the start Need Help? Read It Master It
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:**Example: Calculating Future Value in an Annuity Account**
In this example, we aim to determine the accumulated future value (FV) of a given annuity account. Here's the scenario provided:
- **Monthly deposit:** $110
- **Duration:** 20 years
- **Annual interest rate:** 3%
- **Initial amount in the account:** $12,000
**Instructions:**
1. Assume end-of-period deposits and compounding occur at the same intervals as the deposits.
2. Round your final answer to the nearest cent.
To solve, apply the relevant formulas for an annuity and future value, taking into account the initial deposit and regular contributions over the specified period.
**Need Assistance?**
- Click **Read It** for additional reading materials.
- Click **Master It** for a step-by-step guide.
Using these tools will enhance your understanding of how to calculate future value in various financial contexts.
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