SOLUTION: Suppose you invest $200 a month for 4 years into an account earning 8% compounded monthly. After 4 years, you leave the money, without making additional deposits, in the account fo

Question 1203142: Suppose you invest $200 a month for 4 years into an account earning 8% compounded monthly. After 4 years, you leave the money, without making additional deposits, in the account for another 21 years. How much will you have in the end?
Answer by math_tutor2020(3817) (Show Source): You can put this solution on YOUR website!

First we compute the future value of depositing periodic payments of $200 a month for 4*12 = 48 months.

(note that i = 0.08/12)

The account is valued at $11,269.98 after the four years are up.

That money is then treated as a deposit into an account with the same interest rate and compounding frequency.
The money is not touched for 21 years (aka 21*12 = 252 months)

Use the compound interest formula

Answer: $60,133.51

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