Find the amount accumulated FV in the sinking fund Assume en

Find the amount accumulated FV in the sinking fund. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest ten dollars.) $200 deposited monthly for 18 years at 2% per year

Solution

FV = PMT((1+r)^n-1)/r, with r & n adjusted for periodicity

r = 0.02/12 ; n = 18*12 = 216

FV = 200(( 1+ 0.00167)^216 -1)/(0.02/12)

= 200(1.00167)^216 -1)/0.00167

= $171604.79