Question

you deposit 400$ each month into an account earning 2% interest compounded monthly.

a) how much will you have

in the account in 35 years?

b) how much money will you put into the account?

c) how much total interest will you earn?

Answer 1

a)	$ 2,43,038
Working:
Future value of annuity of 1			=	(((1+i)^n)-1)/i		Where,
			=	(((1+0.001667)^420)-1)/0.001667		i	2%/12	=	0.001667
			=	607.5950664		n	35*12	=	420
Future value of monthly deposit			=	Monthly deposit	*	Future value of annuity of 1
			=	$                 400	*	607.59507
			=	$       2,43,038
b)	$ 1,68,000
Working:
Amount invested			=	Monthly deposit	*	Number of months
			=	$                 400	*	420
			=	$       1,68,000
c)	$     75,038
Working:
Total interest earned			=	Future value of deposits	-	Total amount invested
			=	$       2,43,038	-	$ 1,68,000
			=	$           75,038