John deposited $2,000, at the end of every month for 2 years in a savings account. if the account paid 6% interest, compounded monthly, use table 12-1 from your text to find the future value of his account.

Using the table that is included in the question you will now the answer by looking at the table. The formula to calculate the future value of this account is Pn = P0(1 + r)^n, Pn is the future value of P0, P0 is the original amount invested, r is the rate of interest and n is the number of coumpoundinf periods such as months. The answer in this question is $50,863.92

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marvineetesh3 marvineetesh3 · Answer 2 · 2022-07-02T03:58:06+02:00

John deposited $2,000 at the end of each month into a savings account. The value of his account in the future would be $50,864 if the account earned a monthly compound interest rate of 6%. (app.)

What is the future value?

The value of any asset or investment at a future date is defined as the future value. This is calculated with the help of present value that is invested in present.

Formula:

F = A{[(+i)^n-1]/i}

Where,

F = Future value

A = Annuity

i = Interest Rate

n = Number of periods

Computation of Future value:

According to the given information,

F = ?

A = $2,000

i = 0.5% (6%/12)

n = 24 months (12 months * 2 years)

Now, apply the given values in the above formula, we get

F = A{[(+i)^n-1]/i}

F = $2,000{[(+0.5%)^24-1]/0.5%}

F = $50,864 (app.)

Therefore, the future value of his account will be $50,864 (app.).

Learn more about the future value, refer to:

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