you decide to invest $1,025.00 quarterly in a mutual fund that reports an average return of 9.98% over the…

you decide to invest $1,025.00 quarterly in a mutual fund that reports an average return of 9.98% over the 25 - year life of the mutual fund. assuming that this interest rate continues, and is compounded quarterly, how much will your mutual fund account be worth after 25 years?\nuse this formula:\n$fv = pmt\times\frac{(1 + \frac{r}{n})^{nt}-1}{\frac{r}{n}}$\nenter the dollar amount rounded to the nearest cent.\nyour answer:\nanswer

you decide to invest $1,025.00 quarterly in a mutual fund that reports an average return of 9.98% over the 25 - year life of the mutual fund. assuming that this interest rate continues, and is compounded quarterly, how much will your mutual fund account be worth after 25 years?\nuse this formula:\n$fv = pmt\times\frac{(1 + \frac{r}{n})^{nt}-1}{\frac{r}{n}}$\nenter the dollar amount rounded to the nearest cent.\nyour answer:\nanswer

Answer

Explanation:

Step1: Identify the values

$pmt = 1025$, $r=0.0998$, $n = 4$ (quarter - compounding), $t = 25$

Step2: Calculate $nt$

$nt=4\times25 = 100$

Step3: Calculate $\frac{r}{n}$

$\frac{r}{n}=\frac{0.0998}{4}=0.02495$

Step4: Calculate $(1 + \frac{r}{n})^{nt}$

$(1 + 0.02495)^{100}\approx12.0797$

Step5: Calculate $(1 + \frac{r}{n})^{nt}-1$

$12.0797 - 1=11.0797$

Step6: Calculate $\frac{(1+\frac{r}{n})^{nt}-1}{\frac{r}{n}}$

$\frac{11.0797}{0.02495}\approx444.076$

Step7: Calculate $FV$

$FV=1025\times444.076 = 455177.9$

Answer:

$455177.90$