You deposit $200 each month into an account earning 4% interestcompounded monthly.a) How much...

You deposit $200 each month into an account earning 4% interest compounded monthly.

a) How much will you have in the account in 30 years?

$

b) How much total money will you put into the account?

$

c) How much total interest will you earn?

Solutions

Expert Solution

a.Information provided:

Monthly deposit= $200

Time= 30 years*12= 360 months

Interest rate= 4%/12= 0.3333% per month

The question is solved by computing the future value.

Enter the below to calculate the future value:

PMT= 200

N= 360

I/Y= 0.3333

Press the CPT key and FV to calculate the future value.

The value obtained is 138,809.88.

Therefore, I will have $138,809.88 in the account after 30 years.

b.Money to be put in the account:

= $200*360

= $72,000

c.Total interest earned = $138,809.88 - $72,000

= $66,809.88.

jeff jeffy answered 2 years ago

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