Use the appropriate function in Excel to answer the following question.

**How much money would you have in a savings account at the end of 4 years if the following assumptions were true?**

You make payments of $20 a month to your savings account every month for 4 years.

Your savings account has a fixed APR of 1.3%. Note: A fixed APR is an annual interest rate that does not change during the 4-year period.

You will not take any money out of your savings account during this 4-year period.

You have no beginning balance.

(Round to the nearest cent)

To calculate how much money you would have at the end of 4 years in a savings account with regular monthly payments and a fixed APR, we can use the **Future Value (FV)** function in Excel. The **FV** function calculates the future value of an investment based on periodic payments, a constant interest rate, and the number of periods.

### Formula for **FV** in Excel:
```excel
=FV(rate, nper, pmt, [pv], [type])
```

Where:
- **rate** = the interest rate per period.
- **nper** = the total number of periods.
- **pmt** = the payment made each period (monthly savings).
- **pv** = the present value (initial deposit, in this case, 0).
- **type** = when the payment is made: 0 if at the end of the period, 1 if at the beginning.

### Step-by-Step Breakdown:
1. **rate**: The annual percentage rate (APR) is 1.3%, so the monthly interest rate will be:
   \[
   \text{rate} = \frac{1.3\%}{12} = 0.0010833
   \]
   
2. **nper**: Since you are making payments for 4 years, and payments are monthly, the total number of periods is:
   \[
   \text{nper} = 4 \times 12 = 48 \text{ months}
   \]

3. **pmt**: The monthly payment is $20.

4. **pv**: There is no initial deposit, so **pv** = 0.

5. **type**: Since the payments are made at the end of each month, we set **type** = 0.

### Plugging these values into the Excel **FV** function:

```excel
=FV(0.0010833, 48, -20, 0, 0)
```

- The rate is `0.0010833` (monthly interest rate).
- The number of periods is `48` months.
- The payment is `-20` (negative because it represents money paid out).
- The present value is `0`.
- The type is `0` (payment at the end of each period).

### Result:
When you use the formula, the result will be approximately **$981.47** (rounded to the nearest cent).

You will have **$981.47** in the savings account after 4 years of making monthly deposits of $20 with an APR of 1.3%.

---

Would you like further details or explanations on this?

Here are 5 related questions:
1. How would the result change if the payments were made at the beginning of each month?
2. What if the interest rate was compounded daily instead of monthly?
3. How would the balance change if you started with an initial deposit?
4. How can we calculate the total interest earned over the 4 years?
5. What happens to the future value if you increase the monthly payment?

**Tip:** Always double-check the units of the rate (monthly vs annual) when using financial functions in Excel.

How much money would you have in a savings account at the end of 4 years if the following assumptions were true? You make payments of $20 a month to your savings account every month for 4 years. Your savings account has a fixed APR of 1.3%. You will not take any money out of your savings account during this 4-year period. You have no beginning balance. (Round to the nearest cent)

Learn how to calculate the future value of a savings account with monthly deposits of $20 over 4 years at a 1.3% fixed APR. This problem covers financial mathematics concepts, including the Future Value function and compound interest, suitable for high school students.

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