Question

Kenta wants to save up for a boat. He made an initial investment of $749 into a savings account, and followed it with regular deposits of $125 at the end of each month. The account paid 9.5% p.a. interest compounded monthly. Find the account balance after 8 years.

Answer 1

Future Value = Amount *(1+ monthly rate)^(end period - current period)

Monthly rate = 9.5/12%

Number of monnthly period = 12*8 = 96

Future Value = 749*(1+0.095/12)^(96 -0) + 125*(1+0.095/12)^(96 -1) + 125*(1+0.095/12)^(96 -2) +125*(1+0.095/12)^(96 -3) +125*(1+0.095/12)^(96 -4) +125*(1+0.095/12)^(96 -5) +125*(1+0.095/12)^(96 -6) +125*(1+0.095/12)^(96 -7) +125*(1+0.095/12)^(96 -8) +125*(1+0.095/12)^(96 -9) +125*(1+0.095/12)^(96 - 10) +125*(1+0.095/12)^(96 -11) +........... 125*(1+0.095/12)^(96 -96)

= 19468.68 Answer