Question 1166134: Suppose you invest $120 a month for 6 years into an account earning 8% compounded monthly. After 6 years, you leave the money, without making additional deposits, in the account for another 20 years. How much will you have in the end?
Answer by ikleyn(52781)   (Show Source):
You can put this solution on YOUR website! .
Suppose you invest $120 a month for 6 years into an account earning 8% compounded monthly.
After 6 years, you leave the money, without making additional deposits, in the account for another 20 years.
How much will you have in the end?
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For the first 6 years, it works as an ordinary annuity, and creates Future value of
FV =  = 11043.04 (rounded to the closest cent).
In the next 20 years, it works as an one-time deposit of 11043.04 compounded monthly at 8%.
Working this way, it produces the Future value / (final) amount of
 = 54406.88.
ANSWER. The final value is $54406.88.
Solved.
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