If Jackson deposits 60 at the end of each month in a savings

If Jackson deposits $60 at the end of each month in a savings account earning interest at a rate of 3%/year compounded monthly, how much will he have on deposit in his savings account at the end of 5 years, assuming he makes no withdrawals during that period? (Round your answer to the nearest cent.)

Solution

Future value of annuity = P×[(1+r)^n-1]÷r

r is interest rate per period

P is payment per period

n is number of payments

Future value of annuity:

= $60×[(1+(3%÷12))^(5×12)-1]÷(3%÷12)

= $3,878.80