SOLUTION: Jerry calculates that if he makes a deposit of $5 each month at an APR of 4.8%, then at the end of two years he'll have $100. Benny says that the correct amount is $135. what was t
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Question 1139861: Jerry calculates that if he makes a deposit of $5 each month at an APR of 4.8%, then at the end of two years he'll have $100. Benny says that the correct amount is $135. what was the total amount deposited ( ignoring interest earned)?
The total amount deposited was ? Answer by jim_thompson5910(35256) (Show Source):
Explanation: Jerry is depositing $5 per month for 24 months total, which leads to 5*24 = 120 dollars in total deposits. This is ignoring any interest earned. We only care about the total amount Jerry contributed and no other outside source contributions are considered (you can think of the interest earned as Jerry's friends chipping in to help grow the pot of money).
Extra side info: If you wanted to include interest, then it gets a bit more complicated and you would have to use the future value of annuity formula. However, that's for another problem or lesson.
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