Question

You decide to start a savings account in 2020 and you begin by putting $300 into the account every month. If the APR on the account is 3%, how much money will you have in the account by 2055? Round to the nearest whole dollar. (no commas)

Total in Account: $  

Of your calculated Total deposit amount, how much money total would you have put into the account by 2055? Round to the nearest whole dollar. (no commas)

Total money deposited: $  

How much money in the account would have been earned from interest? Round to the nearest whole dollar. (no commas)

Interest: $  

Answer 1

Answer:

Given,

APR = 3% = 0.03

Monthly amount deposit = $300

Effective monthly interest rate i = 0.03/12 = 0.0025

Time = 2055 - 2020 = 35 years

Number of deposits n = 35*12 = 420

Amount in account at the end of 2055 = 120(((i+1)^n - 1)/i)

substitute values

= 300[((1+0.0025)^420 -1)/0.0025]

Total amount in account = 222469.0971

Total amount deposited in account = 300*n

= 300*420

= 126000

Interest earned = Total amount in account - Total amount deposited in account

= 222469.0971 - 126000

= $96469.0971