Question #60358

Clem is saving for a car in a bank account that pays 12% interest, compounded monthly. The balance is now $2400. Clem will be saving $120 per month from his salary, and once every four months (starting in 4 months) he adds $200 in dividends from an investment. Bank fees, currently $10 per month, are expected to increase by $1 per month henceforth. How much will Clem have saved in two years?

Expert's answer

According to all the data Clem will have saved in two years such sum:

FV = 2400*(1 + 0.12/12)^24 + 120*24 + 200*5 - 11*24 = $6,663.36.

FV = 2400*(1 + 0.12/12)^24 + 120*24 + 200*5 - 11*24 = $6,663.36.

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