Answer:
interest earned= 12.47
the future value of an annuity= 162.47
Step-by-step explanation:
Given Data:
Interest rate,r= 4%
time,t = 2 years
monthly payment, P= 150
n= 12 as monthly
At the end of 2 years, final investment A= ?
As per the interest formula for compounded interest
A= P(1+r/n)^nt
Putting the values in above equation
= 150(1+0.04/12)^24
= 162.47
Interest earned = A-P
= 162.47-150
= 12.47 !
