SOLUTION: If Jackson deposits $130 at the end of each month in a savings account earning interest at a rate of 8%/year compounded monthly, how much will he have on deposit in his savings acc
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Question 1098656: If Jackson deposits $130 at the end of each month in a savings account earning interest at a rate of 8%/year compounded monthly, how much will he have on deposit in his savings account at the end of 4 yr, assuming he makes no withdrawals during that period?
Answer by jorel1380(3719) (Show Source): You can put this solution on YOUR website!
In this case, we have the following savings plan formula:
A=PMT×[(1 +APR/n)^(nY)−1]/(APR/n)
where
A
=
accumulated savings plan balance
P M T
=
regular payment (deposit) amount
APR
=
annual percentage rate (as a decimal)
n
=
number of payment periods per year
Y
=
number of years
So:
A=130*(1+(.08/12))^(4*12) -1)) / (.08/12)
A=130*0.37566610043379451080653376807126 / 0.00666666666666666666666666666667
A= $7325.489
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