Savings account interest

Accounting
Tutor: None Selected Time limit: 1 Day

You wish to deposit $500 per month into an account for 36 months. Assume your interest rate is 3.25%, compounded monthly. How much do you have after 36 months? Show formula and workout.

Jun 24th, 2014

Answer: $18,879.91

Formula: FV = C*[(1+i)^n-1]/i   , where C = monthly deposit, i = interest rate, n = number of periods

Thus, FV = 500*[(1+(.0325/12))^36-1]/i

FV = 500*.1022661606/.0027083333 = 18,879.91

Jun 24th, 2014

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