document.write( "Question 1154906: find the amount of annuity that consists of 24 monthly payments of $500 each into an account that pays 8% interest per year, compounded monthly \n" ); document.write( "

Algebra.Com's Answer #777447 by ikleyn(52798) $\"\"$ $\"About$

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document.write( "It is a classic Ordinary Annuity saving plan. The general formula is \r\n" );
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document.write( "    FV = ,    (1)\r\n" );
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document.write( "where  FV is the future value of the account;  P is your the monthly payment (deposit); r is the monthly percentage \r\n" );
document.write( "yield presented as a decimal; n is the number of deposits (= 24, in this case).\r\n" );
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document.write( "Under the given conditions, P = 500;  r = 0.08/12;  n = 24.  So, according to the formula (1), you get at the end of the 24-th month\r\n" );
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document.write( "    FV =  = $12,955.59.\r\n" );
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document.write( "Note that you deposit only  24*$500 = $12,000.  The rest is what the account earns/accumulates in 24 months.\r\n" );
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\n" ); document.write( "\n" ); document.write( "On Ordinary Annuity saving plans, see the lessons\r
\n" ); document.write( "\n" ); document.write( " - Ordinary Annuity saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( " - Solved problems on Ordinary Annuity saving plans\r
\n" ); document.write( "\n" ); document.write( "in this site.\r
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\n" ); document.write( "\n" ); document.write( "The lessons contain EVERYTHING you need to know about this subject, in clear and compact form.\r
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\n" ); document.write( "\n" ); document.write( "When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.\r
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