In 1986, a family member invested $100 each month into a savings account with an interest rate of 0.25% (that didn't change). In 2016, you decided you needed to use that saved up money for a big purchase, so you cash the savings account out. How much money should be in the account using the FV formula?   If your family put the $105 each month instead of just the $100, how much extra would be in the account compared to the total value from the first part?   If you were to invest $200 each month, what would your savings account have in 2016?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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In 1986, a family member invested $100 each month into a savings account with an interest rate of 0.25% (that didn't change). In 2016, you decided you needed to use that saved up money for a big purchase, so you cash the savings account out.

How much money should be in the account using the FV formula?

 

If your family put the $105 each month instead of just the $100, how much extra would be in the account compared to the total value from the first part?

 

If you were to invest $200 each month, what would your savings account have in 2016?

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