SOLUTION: When saving to buy a car, i placed the $2000 i had already in an account that earned 3.5% interest paid monthly. I also deposited $650 from my wages each month into the same accoun

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Question 1068959: When saving to buy a car, i placed the $2000 i had already in an account that earned 3.5% interest paid monthly. I also deposited $650 from my wages each month into the same account. What will be my final balance at the end of 2 years?
Found 2 solutions by Theo, MathTherapy:
Answer by Theo(13342)   (Show Source): You can put this solution on YOUR website!
as best i can determine, you will have $10,832.67 at the end of 2 years, which is at the end of 24 months.

your total investment is 2000 + 24 * 350 = $10,400.

the rest is interest.

you can use time value of money formulas or you can use future value of cash flow formulas to get this answer.

the brute force method is to find the future value of each of the monthly values and then add them up.

for example:

future value of 2000 for 24 months is 2000 * (1 + .035/12) ^ 24
future value of 350 for 23 months is 350 * (1 + .035/12) ^ 23
future value of 350 for 22 months is 350 * (1 + .035/12) ^ 22
etc.....

then you add them up and you will get a future value of $10,832.67.

if you use time value of money formulas, you would find the future value of 2000 for 24 months and then you would find the future value of monthly payments of 350 at the end of each month for 24 months.

i used an online financial calculator and this is what i got.

the online financial calculator can be found at:
http://arachnoid.com/finance/

these are my results.

future value of 2000 = 2144.80
future value of 350 monthly payments = 8687.87
total future value = 10832.67

first picture is future value of 2000.
second picture is future value of monthly payments of 350.
you're looking for future value in both pictures.

$$$

$$$
Answer by MathTherapy(10552)   (Show Source): You can put this solution on YOUR website!

When saving to buy a car, i placed the $2000 i had already in an account that earned 3.5% interest paid monthly. I also deposited $650 from my wages each month into the same account. What will be my final balance at the end of 2 years?
The $2,000 deposit represents the PRESENT VALUE, so the formula for the FUTURE VALUE of $1 MUST be used to calculate the FUTURE VALUE of $2,000 at the end of 2 years.

This will be $2,144.80.

The formula for the FUTURE VALUE of an ORDINARY ANNUITY MUST be used to calculate the FUTURE VALUE of 24 monthly payments of $650, at the end of 2 years.

This will be $16,134.62.

Add those 2 amounts to get:  

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