Sera deposits $2500 per month in a retirement annuity that pays 3.6% interest compounded monthly. If no other changes are made, find the amount that the annuity

Question

Find the amount that the annuity will have after 10 years. show steps please.

Answer 1

The equation for compound interest is:

T=P*(1+r/n)^n*t

where:
T=total amount
P=principal
r=annual interest rate
n=frequency of compounding per year
t=number of years

 

In this case:

P=2500

r=0.036

n=12

t=10

 

So at the end of 10 years:

 

T=2500*(1+0.036/12)^(12*10)=2500*(1.003)^120=$3581.39