SOLUTION: An initial deposit of $15,000 is made into an account and monthly deposits of $5,000 are made thereafter. Interest is pays at 8% per year. Set up a table to show how much money i

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Question 239740: An initial deposit of $15,000 is made into an account and monthly deposits of $5,000 are made thereafter. Interest is pays at 8% per year. Set up a table to show how much money is in the account at the end of each month for the first 5 months
Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website!
Interest rate per month is calculated as .08/12 + 1 = 1.0066666667

In the beginning you deposit 15,000

Interest is compounded monthly has been assumed though not stated.

Payments are made at the end of each month has been assumed though not stated.

The money invested is multiplied by (1 plus the interest rate) and then the payment is added.

Here's how it works.

x = (1 + i) = 1.0066666667

This is rounded here but not in the calculator.

All the numbers below are truncated to the nearest dollar but the complete number is stored in the calculator and used in the calculations.

you invest 15000.
at the end of the first month you have:
15000 * x = 15100 + 5000 = 20100
at the end of the second month you have:
20100 * x = 20234 + 5000 = 25234
at the end of the third month you have:
25234 * x = 25402 + 5000 = 30402
at the end of the fourth month you have:
30402 * x = 30604 + 5000 = 35604
at the end of the fifth month you have:
35604 * x = 35842 + 5000 = 40842

The complete number is:

40842.27423

That's $40,842.27

I confirmed using a financial calculator that this number is correct.