SOLUTION: Find the value and interest of $80 deposited at the end of each month at 4.5% compounded monthly for 25 years

Question 1004060: Find the value and interest of $80 deposited at the end of each month at 4.5% compounded monthly for 25 years
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Find the value and interest of $80 deposited at the end of each month at 4.5% compounded monthly for 25 years
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Formula:
MP =P[(i/C)(1+(1/C))^(NC))/((1+i/C)^(NC) - 1]
Solve for "P"
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Note::
i/C 0.045/12 = 0.00375
NC = 25*12 = 300
MP= 80
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80 = P[(0.00375)(1.00375)^300]/(1.00375)^300-1)]
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P = 80/[(0.00375)(1.00375)^300]/(1.00375)^300-1)]
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P = $14392.83 (amt. of the original debt to be paid off)
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Interest = (total paid - owed)/(owed) = ([(80*12*25)-14392.83]/14392.83
= 0.67 = 67%
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Cheers,
Stan H.
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