Question

You deposit $290 each month into an account earning 3.5% 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? $ LA c) How much total interest will you earn?

Answer 1

To find the future amount, use the compound interest formula A = P(1 + r/n)^(nt). In 30 years, the account will have approximately $168,262.09. The total money put into the account will be $104,400 and the total interest earned will be $63,862.09.

Step-by-step explanation:

To calculate the future value of the account, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the future amount, P is the principal amount deposited each month, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years.

a) To find the future amount in 30 years, we plug in the values into the formula: A = 290(1 + 0.035/12)^(12*30). After solving the equation, the future amount will be approximately $168,262.09.

b) The total money put into the account can be found by multiplying the monthly deposit by the total number of months: Total money = 290 * 12 * 30 = $104,400.

c) The total interest can be found by subtracting the total money put into the account from the future amount: Total interest = Future amount - Total money = $168,262.09 - $104,400 = $63,862.09.