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Homework answers / question archive / You plan to buy a house in 4 years
You plan to buy a house in 4 years. You want to save money for a down payment on the new house. You are able to place $311 every month at the end of the month into a savings account at an annual rate of 5.11 percent, compounded monthly. How much money will be in the account after you made the last payment?
Computation of Accumulated Amount using FV Function in Excel:
=-fv(rate,nper,pmt,pv)
Here,
FV = Future Value or Accumulated Amount = ?
Rate = 5.11%/12 = 0.4258% compounded monthly
Nper = 4 years * 12 months = 48 months
PMT = Monthly Savings = $311
PV = 0
Substituting the values in formula:
=-fv(0.4258%,48,311,0)
FV or Future Value = $16,524.25
