.
It is a classic Ordinary Annuity saving plan. The general formula is
FV = , (1)
where FV is the future value of the account; P is your the monthly payment (deposit); r is the monthly percentage
yield presented as a decimal; n is the number of deposits (= 24, in this case).
Under the given conditions, P = 500; r = 0.08/12; n = 24. So, according to the formula (1), you get at the end of the 24-th month
FV = = $12,955.59.
Note that you deposit only 24*$500 = $12,000. The rest is what the account earns/accumulates in 24 months.
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On Ordinary Annuity saving plans, see the lessons
- Ordinary Annuity saving plans and geometric progressions
- Solved problems on Ordinary Annuity saving plans
in this site.
The lessons contain EVERYTHING you need to know about this subject, in clear and compact form.
When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.