SOLUTION: Suppose a particular bank gives 3% interest on its savings accounts, compounded monthly. If one opens a savings account and deposits $ 300 each month for a total of 11 years, how m

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Question 542769: Suppose a particular bank gives 3% interest on its savings accounts, compounded monthly. If one opens a savings account and deposits $ 300 each month for a total of 11 years, how much money will be in the account after the last deposit is made?
Answer by solver91311(24713) (Show Source):
You can put this solution on YOUR website!

You want the future value of an ordinary annuity:

Where

is the regular payment amount

is the interest per period as a decimal

is the number of periods.

3% per annum divided by 12 months is 0.06 divided by 12 equals 0.0025 per period.

11 years times 12 months per year is 132 periods.

So:

Get out your calculator and get to work.

Note that this is only valid if you make the $300.00 deposit at the end of each month.

If you make the deposits at the beginning of each month, then you want the Future Value of an Annuity Due,

So for beginning of the month deposits you would just multiply your previous result by

John

My calculator said it, I believe it, that settles it