Question

suppose you invest $50 a month for 5 years into an account earning 8% compounded monthly. After 5 years you leave the noney without making additional deposits, in the account for another 25 years how much will you have in the end?

Answer 1

The amount after another 25 years is $546.79.

Step-by-step explanation:

Principle amount = $50

Interest rate = 8% compounded monthly.

Time = 5+25 = 30 years

The formula for amount is

`A=P(1+(r)/(n))^(nt)`

where,

A = total amount

P = principal or amount of money deposited,

r = annual interest rate

n = number of times compounded per year

t = time in years

Substitute P=50, r=0.08, n=12 and t=30 in the above formula.

`A=50(1+(0.08)/(12))^(12(30))`

`A=50(1+(0.08)/(12))^(360)`

`A=546.786482888`

`A\approx 546.79`

Therefore the amount after another 25 years is $546.79.