SOLUTION: 1. Ben saves $50 per month in a credit union that has an annual interest rate of 6% compounded monthly. How much money will Ben have in his account after a) Six deposits? b) 3

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: 1. Ben saves $50 per month in a credit union that has an annual interest rate of 6% compounded monthly. How much money will Ben have in his account after a) Six deposits? b) 3       Log On

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Question 1100612: 1. Ben saves $50 per month in a credit union that has an annual interest rate of 6% compounded monthly. How much money will Ben have in his account after
a) Six deposits?
b) 3 years?
c) How long will it take him to accumulate $1,000?
Answer by jorel1380(3719) About Me  (Show Source):
You can put this solution on YOUR website!
The formula for the future value of a payment is:
FV=%28%28P%28%281%2Bi%29%5En%29+-1%29%2Fi%29
where FV = Future Value
PMT = Payment per time period
i = Interest Rate per Time Period
n = Number of Time Periods
So:
a)FV(6)=50(1+((.06/12))^6)-1)/(.06/12)
FV=50*(1.005)^6 -1/.005=$303.78
b)FV(36)=50((1.005)^36 -1/.005=$1966.81
c)1000=50((1.005)^n)-1)/.005
0.1=(1.005)^n -1
1.1=1.005^n
ln 1.1=ln 1.005^n=n ln 1.005
n=19.11 months
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