SOLUTION: If Jackson deposited $400 at the end of each month in the saving account earing interest at the rate of 6%/year compounded monthly, how much will he have on deposite in his savings

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Question 1053994: If Jackson deposited $400 at the end of each month in the saving account earing interest at the rate of 6%/year compounded monthly, how much will he have on deposite in his savings account at the end of 6 years, assuming that he makes no withdrawals during that period? Round your answers to two decimal places.
​

a. $34,538.54

b. $34,563.54

c. $34,541.61

d. $34,490.17

e. $34,463.31
Please Explain. Thank you
Found 5 solutions by mananth, math_tutor2020, ikleyn, greenestamps, MathTherapy:
Answer by mananth(16946)   (Show Source): You can put this solution on YOUR website!
formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = principal
r = the annual interest rate (as a decimal)
n = the number of periods the interest is compounded per year
t = the time in years

P = $400
r = 6% = 0.06 (annual rate)
n = 12 (monthly compounding)
t = 6 (years)
A = 400(1 + 0.06/12)^(12*6)
A = 400(1.005)^72
A = $31,159.12
Jackson will have $31,159.12 at the end of 6 years.
Answer by math_tutor2020(3817)   (Show Source): You can put this solution on YOUR website!

Answer: choice B) $34,563.54

Explanation:

We won't be using the classic compound interest formula.
This is because Jackson makes periodic deposits rather than one single deposit.

Instead we use the future value of annuity formula.

where,
FV = future value
P = periodic payment or deposit
i = interest rate per period (decimal form)
n = number of periods

In Jackson's case:
P = 400
i = 0.06/12 = 0.005
n = 12*6 = 72 months

So,




approximately

rounding to the nearest penny

This points us to choice B as the final answer.

Future value of annuity calculator
https://www.omnicalculator.com/finance/annuity-future-value
Answer by ikleyn(52864)   (Show Source): You can put this solution on YOUR website!
.

To future generations of students who may read this post:


        Calculations by @mananth are  TOTALLY  WRONG  and  IRRELEVANT.

        Ignore his post,  for your safety.



Answer by greenestamps(13206)   (Show Source): You can put this solution on YOUR website!


Occasionally, tutor @mananth supplies useful responses to readers' questions. However, she apparently doesn't look at what she is posting before she posts it, so many of her responses are useless.

On this problem, she answered a question different than the one that was asked; and in doing so she supplied an answer that defies common sense. How can an investment of $400 at 6% interest for 6 years yield a final value of $31,159.12?
Answer by MathTherapy(10556)   (Show Source): You can put this solution on YOUR website!
If Jackson deposited $400 at the end of each month in the saving account earing interest at the rate of 6%/year compounded monthly, how much will he have on deposite in his savings account at the end of 6 years, assuming that he makes no withdrawals during that period? Round your answers to two decimal places.
​

a. $34,538.54
		
b. $34,563.54
	
c. $34,541.61
		
d. $34,490.17
	
e. $34,463.31

Please Explain. Thank you

For the "life of me," how on God's green earth did that person get  to be $31,159.12,
which by the way, is NOT even one of the choices? Isn't that calculation 572.8177114?

I do believe that something should be done to prevent this person from attempting to help these "poor souls" who're
genuinely seeking help with their math problems. It's bad enough that they're already confused and may not know
where to turn to to get help, and then this....a plethora of mostly ridiculous and totally incorrect responses
from this person. Something needs to be done!! Why does someone or more than one person has to continue to clean
up this person's MESS?
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