document.write( "Question 1185786: How much money will I have if I am going to deposit $1000 every month (starting now) for 5 years if the interest rates are 6%/a compounded monthly? \n" ); document.write( "
Algebra.Com's Answer #816638 by ikleyn(52776)\"\" \"About 
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\n" ); document.write( "How much money will I have if I am going to deposit $1000 every month (starting now)
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\n" ); document.write( "\n" ); document.write( "            What @Theo calculated for you,  was the  Ordinary  Annuity saving plan,  when the regular deposits are made at the END of each month.\r
\n" ); document.write( "\n" ); document.write( "            The given problem asks about the  Annuity  Due saving plan,  when the regular deposits are made AT THE BEGINNING of each month.\r
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\n" ); document.write( "\n" ); document.write( "            So,  @Theo's calculations are not appropriate for this problem.\r
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\n" ); document.write( "\n" ); document.write( "            THEREFORE,  I came to bring you a correct solution.\r
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document.write( "It is a classic Annuity Due saving plan. The general formula is \r\n" );
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document.write( "    FV = \"P%2A%281%2Br%29%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 your monthly payment (deposit); r is the monthly percentage yield presented as a decimal; \r\n" );
document.write( "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 = 1000;  r = 0.06/12;  n = 12*5 = 60.  So, according to the formula (1), you get at the end of the 20-th year\r\n" );
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document.write( "    FV =  = \"1000%2A1.005%2A%28%28%281%2B0.005%29%5E60-1%29%2F0.005%29%29\" = $70,118.88.    ANSWER\r\n" );
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document.write( "Note that you deposit only  12*5*$1000 = $60,000.  The rest is what the account earns/accumulates in 5 years.\r\n" );
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\n" ); document.write( "\n" ); document.write( "On  Ordinary  Annuity and  Annuity  Due 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( "    - 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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