The formula to find the value of the investment after 25 years of payments is: FV = PMT ((1 + i)^n – 1) / I Where: FV = Future Value PMT = Payment = $200 I = interest per compounding period in decimal form = 0.035 / 12 = 0.00291667 n = number of compounding periods = 25 * 12 = 300 FV = 200 ((1 + 0.00291667)^300 – 1) / 0.00291667 FV = 200 ((1.00291667)^300 – 1) / 0.00291667 FV = 200 (2.395822112 – 1) / 0.00291667 FV = 200 1.395822112 / 0.00291667 FV = 200 * 478.5675814 FV = 95713.51628 = $95,713.52 Next, the formula for future value without payments is: FV = PV (1 + i)^n Where: FV = Future Value PV = Present Value = 95,713.51628 I = interest rate per compounding period in decimal form = 0.044 / 12 = 0.003666667.
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