SOLUTION: Suppose you invest $150 a month for 5 years into an account earning 8% compounded monthly. After 5 years, you leave the money, without making additional deposits, in the account fo

Question 1195619: Suppose you invest $150 a month for 5 years into an account earning 8% compounded monthly. After 5 years, you leave the money, without making additional deposits, in the account for another 25 years. How much will you have in the end?
$

Suppose instead you didn't invest anything for the first 5 years, then deposited $150 a month for 25 years into an account earning 8% compounded monthly. How much will you have in the end?
$

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
your answers using the calculator at https://arachnoid.com/finance/ are:

the same answers using an excel spreadsheet are:

the procedure using the calculator is as follows:

first you want to find the future value of monthly payments of 150 at 8% compounded monthly for 60 months (5 years).
that value is 11021.53.

next you want to find the future value of that amount at 8% compounded monthly for 300 months (25 years).
that value is 80899.97.

next you want to find the future value of monthly payments of 150 at 8% compounded monthly for 300 months (25 years).
that value is 142653.96.

the excel spreadsheet does the same calculations month by month.

column A shows the end of month indicated.
column B shows the remaining balance of the first calculation which is 60 months of 150.
column C shows the remaining balance of the results from column B being brought forward for an additional 300 months with no additional payments.
column D shows the remaining balance of monthly payments of 150 for 300 months.

let me know is you have any questions.
theo

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