Savings

Suppose on your 21st birthday you begin making monthly payments of $500 into an account that pays 8% compounded monthly. If you continue the payments untill your 51st birthday (30 years), How much money will be in your account? How much of it is interest? Show solution.

(Future value with regular contributions, future value of a series)

Correct answer:

x =  745179.7243
i =  565179.7243

Step-by-step explanation:

PMT=500 r=8%=8100=0.08 n=12 t=30  q=r/n=0.08/12=11500.0067 m=n t=12 30=360  x=PMT (1+q)m1q=500 (1+0.0067)36010.0067=745179.7243=7.452105
i=xm PMT=745179.7243360 500=565179.7243=5.652105



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