Question

1) You deposit $500 each month into an account earning 3%
interest compounded monthly.

a) How much will you have in the account in 25 years?

b) How much total money will you put into the account?

c) How much total interest will you earn?

2) Suppose you invest $190 a month for 6 years into an account earning 7% compounded monthly. After 6 years, you leave the money, without making additional deposits, in the account for another 21 years. How much will you have in the end?

3) You deposit $5000 each year into an account earning 4% interest compounded annually. How much will you have in the account in 25 years?

Answer #1

1) If we deposit $500 each month earning interest of 3% compounded monthly for 25 years, it means we will get the interest at the rate of 3%/12 and we have 12*25 periods. Enter the following in the financial calculator

PMT = 500; n=25*12; 1/y = 3%/12, PV = 0; Calculate FV = $223,003.91

b) Total money that we put into the account is 500*12*25 = $150,000

c) Total interest earned = Total maturity amount - total money put into the account.

=$223,003.91 - $150,000 = $73,003.91

You deposit $500 each month into an account earning 4%
interest compounded monthly. How much will you have in the account
in 30 years? How much total money will you put into the account?
How much total intrest will you earn?

You deposit $300 each month into an account earning 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?
$
c) How much total interest will you earn?
$

You deposit $300 each month into an account earning 2% annual
interest compounded monthly
A. How much money will you have in your account in 35 years?
B. How much total money will you put into the account ?
C. How much total interest will you earn?

6. You deposit $400 each month into an account earning 5%
interest compounded monthly.
a) How much will you have in the account in 35 years?
b) How much total money will you put into the account?
c) How much total interest will you earn?
7. Suppose you want to have $500,000 for retirement in 25 years.
Your account earns 7% interest.
a) How much would you need to deposit in the account each
month?
b) How much interest will...

You deposit $150 each month into an account earning 5% interest
compounding monthly.
a) How much will you have in the account in 35 years?
b) How much total money will you put in the account?
c) How much total interest will you earn?

You deposit $2000 in an account earning 3% interest compounded
monthly
How much will you have in the account in 20 years?
How much interest will you earn?
You deposit $10,000 in an account earning 4% interest compounded
monthly.
How much will you have in the account in 25 years?
How much interest will you earn?

Suppose you invest $140 a month for 5 years into an account
earning 6% compounded monthly. After 5 years, you leave the money,
without making additional deposits, in the account for another 26
years. How much will you have in the end?

For 20 years Jenny deposits $500 at the end of each month in an
account earning 4.5% per year compounded monthly.
How much will she have in the account in 20
years?
How much interest did she earn in this 20 year
period?
for the next 25 years Jenny neither deposits nor withdraws any
money while the account continues to earn 4.5% per year compounded
monthly.
How much does Jenny have in the account after
these 25 years?
How much...

You deposit $4000 each year into an account earning 3% interest
compounded annually. How much will you have in the account in 25
years?

suppose you invest $190 at the end of each month for 5 years
into an account earning 7% annual interest compounded monthly.
After 5 years, you leave the money, without making additional
deposits, in the account for another 21 years. How much will you
have in the end?

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