Answer :
For monthly payments, monthly interest, i = APR/12=0.03/12=0.0025
Time period, n = 12
Monthly payment, A = $150
Future value
= A((1+i)^n-1)/i
= 150((1.0025^12-1)/.0025
= 1824.96 (to the nearest cent)
Time period, n = 12
Monthly payment, A = $150
Future value
= A((1+i)^n-1)/i
= 150((1.0025^12-1)/.0025
= 1824.96 (to the nearest cent)
The savings plan balance after 12 months is $154.56
Calculation to determine the savings plan balance after 12 months
First step is to calculate the growth factor
Growth factor = (1 + (0.03 / 12)) per month
Growth factor = 1.0025
Now let calculate the savings plan balance after 12 months
Savings plan balance after 12 months=($150.00)×(1.0025)^12
Savings plan balance after 12 month=$150.00×1.03041596
Savings plan balance after 12 month=$154.56
Inconclusion The savings plan balance after 12 months is $154.56.
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