document.write( "Question 1169701: Someone opens an investment account with an initial deposit of $ 900. They then set up monthly deposits of $ 130 to the account. If the account earns 4.5% interest compounded monthly, how much money will they have in the account in 7 years? \n" ); document.write( "

Algebra.Com's Answer #851290 by ikleyn(52781) $\"\"$ $\"About$

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\n" ); document.write( "Someone opens an investment account with an initial deposit of $ 900.
\n" ); document.write( "They then set up monthly deposits of $ 130 to the account.
\n" ); document.write( "If the account earns 4.5% interest compounded monthly, how much money
\n" ); document.write( "will they have in the account in 7 years?
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document.write( "It works as if you have two separate accounts:\r\n" );
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document.write( "    (a) one account is the principal $900 deposited once for 7 years at 4.5% compounded monthly;\r\n" );
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document.write( "    (b) and the other, which is an Ordinary Annuity plan with $130 deposits at the end of each month \r\n" );
document.write( "        at 4.5% compounded monthly.\r\n" );
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document.write( "For the first account, the future value in 7 years is\r\n" );
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document.write( "        FV1 =  = 1232.51  dollars  (rounded).\r\n" );
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document.write( "For the second account, the future value in 7 years is\r\n" );
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document.write( "        FV2 =  = 12807.68  dollars  (rounded).\r\n" );
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document.write( "Now, the future value of the original account in 10 years is the sum of these two amounts \r\n" );
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document.write( "        FV = FV1 + FV2 = 1232.51 + 12807.68  = 14040.19 dollars.    ANSWER\r\n" );
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