Question 1135528: If I opened up a savings account in Dec 2015 and paid in £1,200 that month, then £200 a month for just over 3 years until Feb 2019 and there was an annual interest rate of 4% for 2 years (to Dec 17) and then 2.25% for the remaining term - how much should be in there as of now?? Total amount paid in is £8,800.
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! i used excel to solve this.
i got $8,800.00 as the total amount invested.
i got $9,289.83 as the total value in the account at the end of the investment period.
here's what my excel spreadsheet looked like.
the account was opened in december, 2015 with a deposit of $1200.
starting in january, 2015, $200 was deposited each month until february, 2019.
that's 37 months * $200 = $7400 + $1200 = $8800.
the interest rate was 4% oer year from december, 2015 to december, 2017.
the interest rate was then 2.25% per year from january, 2018 to february, 2019.
the investment period was therefore split into two parts.
the first part at 4% per year.
the second part at 2.25% per year.
i calculated this again using a financial calculator and got the same answer.
here's what i did.
first i took $1,200 and got the future value for it for 24 months at 4% per year divided by 12 = .3333333333 percent per month.
the future value of that was $1,299.77 in december, 2017.
i then took $200 at the end of each month starting in december, 2015 for 24 months.
the future value of those payments was $4,988.58 in december, 2017
the total future value in december, 2017 was $1,299.77 + $4,988.58 = $6,288.35.
that became the present value for the next 14 months to february, 2019.
the future value of that at 2.25% per year / 12 = .1875% per month was $6,455.45.
i then took $200 per month from december, 2017 to february, 2019 at .1875% per month and got a future value of $2,834.38
the total future value in february, 2019 was $6,455.45 + $2,834.38 = $9,289.83.
that agrees with the excel analysis.
it looks good to me as far as i can tell.
the $200 payments starting in december, 2015 were made at the end of each month which means the first payment was at the end of december which was the beginning of march.
same with the $200 payments starting in december, 2017.
here's my financial calculator results.
it was a real bear keeping track of this.
the excel analysis helped.
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