document.write( "Question 1163402: You deposit $400 each month into an account earning 7% interest compounded monthly.\r
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Algebra.Com's Answer #787483 by ikleyn(52813)\"\" \"About 
You can put this solution on YOUR website!
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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 = \"P%2A%28%28%281%2Br%29%5En-1%29%2Fr%29\",    (1)\r\n" );
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document.write( "where  FV is the future value of the account;  P is the monthly payment (deposit); r is the monthly percentage yield \r\n" );
document.write( "presented as a decimal; n is the number of deposits (= the number of years multiplied by 12, in this case).\r\n" );
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document.write( "Under the given conditions, P = 400;  r = 0.07/12;  n = 12*20 = 240.  So, according to the formula (1), you get \r\n" );
document.write( "at the end of the 20-th year\r\n" );
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document.write( "    FV = \"400%2A%28%28%281%2B0.07%2F12%29%5E%2812%2A20%29-1%29%2F%28%280.07%2F12%29%29%29\" = \"400%2A%28%28%281%2B0.07%2F12%29%5E240-1%29%2F%28%280.07%2F12%29%29%29\" = $208,370.70.\r\n" );
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document.write( "Note that you deposit only  12*20*$400 = $96,000.  \r\n" );
document.write( "The rest  $208370.70 - $96000 = $1212370.70  is the interest what the account earns/accumulates in 20 years.\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
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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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