SOLUTION: Suppose you invest $150 a month for 3 years into an account earning 7% compounded monthly. After 3 years, you leave the money, without making additional deposits, in the account fo
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Question 1195633: Suppose you invest $150 a month for 3 years into an account earning 7% compounded monthly. After 3 years, you leave the money, without making additional deposits, in the account for another 25 years. How much will you have in the end? Answer by Boreal(15235) (Show Source):
You can put this solution on YOUR website! P=m((1+(r/n))^nt-1/(r/n); r/n=.07/12; nt=12*3=36
P=150(1.00583333)^36-1/0.00583333
round only at end
=$5989.52
now for that over the next 25 years, use P=5989.52(1.0058333333)^300
=$34,392.50 is the answer.
rough check:
rule of 70 says double in 10 years.
25 years is two doublings and more. but not 3.
Two doublings is almost $24,000. Three would be $48,000. This answer is reasonable.
