document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1201794>Question 1201794</A>: <I><SPAN STYLE=\"word-break: break-all;\"> You put $159 per month in an investment plan that pays an APR of 5%. How much money will you have after 24 years? Compare this amount to the total amount of deposits made over the time period. </SPAN>\n" );
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document.write( "Answers: <BR>\n" );
document.write( "future balance = <font color=red>$88,220.19</font> <BR>\n" );
document.write( "total deposits = <font color=red>$45,792</font> \r<BR>\n" );
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document.write( "Work Shown:\r<BR>\n" );
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document.write( "P = 159 = monthly payment<BR>\n" );
document.write( "r = 0.05 = APR in decimal form<BR>\n" );
document.write( "i = r/12 = 0.05/12 = 0.00416666666666667 approximately = monthly interest rate in decimal form<BR>\n" );
document.write( "n = 24*12 = 288 months\r<BR>\n" );
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document.write( "We have these inputs<BR>\n" );
document.write( "P = 159<BR>\n" );
document.write( "i = 0.00416666666666667 (approximately)<BR>\n" );
document.write( "n = 288\r<BR>\n" );
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document.write( "Compute the future value of the annuity<BR>\n" );
document.write( "Use an ordinary annuity and not annuity due.<BR>\n" );
document.write( "FV = P*( (1+i)^n - 1 )/i<BR>\n" );
document.write( "FV = 159*( (1+0.00416666666666667)^288 - 1 )/0.00416666666666667<BR>\n" );
document.write( "FV = 88220.1931150959<BR>\n" );
document.write( "FV = <font color=red>88220.19 dollars</font> will be the account balance after 24 years (aka 288 months)\r<BR>\n" );
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document.write( "Let's compare that to what the balance would be if no interest is added.<BR>\n" );
document.write( "You deposit $159 per month for 288 months to get 159*288 = <font color=red>45792 dollars</font> of total deposits. \r<BR>\n" );
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document.write( "Subtract the two values marked in red to determine how much more is earned<BR>\n" );
document.write( "88220.19 - 45792 = 42428.19<BR>\n" );
document.write( "You earn 42,428.19 more dollars if the money is compounded with interest.\r<BR>\n" );
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document.write( "Future value annuity calculator<BR>\n" );
document.write( "<a  rel=nofollow HREF= \"https://www.omnicalculator.com/finance/annuity-future-value\">https://www.omnicalculator.com/finance/annuity-future-value</a><BR>\n" );
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