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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?

User Cartant
by
7.8k points

1 Answer

1 vote

Answer:

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.

User Sunil Gupta
by
7.7k points
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