The Pirerras are planning to go to Europe 2 years from now a

The Pirerras are planning to go to Europe 2 years from now and have agreed to set aside $170/month for their trip. If they deposit this money at the end of each month into a savings account paying interest at the rate of 2%/year compounded monthly, how much money will be in their travel fund at the end of the second year? (Round your answer to the nearest cent.)

Solution

FVoa = PMT [(((1 + i)^n) - 1) / i]
Where:
FVoa = Future Value of an Ordinary Annuity
PMT = Amount of each payment (170)
i = Interest Rate Per Period (0.02)
n = Number of Periods (2 x 12)=24

$5171.72