Question

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?

Answer 1

a) The total value of the account in 35 years is computed here as:

= Future value of each of the $300 monthly installments at the end of the 35 year period

therefore $182,568.11 is the required money we will have in the account in 35 years.

b) Total money that would be put in account is computed here as:

= 300*Total months of installments

= 300*12*35

= 126000

Therefore $126,000 is the total money put in the account.

c) The total interets earned here is computed as:

= Total Amount value at end of period - Total installments put in the account

= 182,568.11 - 126000

= 56568.11

therefore $56,568.11 is the required total interest earned.