Question 1120480
Jimmy opens a savings account with a $280 deposit at the beginning of the month. The account earns 4.3% annual interest compounded monthly. At the beginning of each subsequent month, Jimmy deposits an additional $280. How much will the account be worth at the end of 14 years? $
<pre>You need to apply the formula for future value of an ANNUITY DUE, or: {{{highlight_green(matrix(1,3, FV[ad], "=", PMT * (((1+i/m)^(mt)-1)/(i/m))*(1+i)))}}}, and
<b><u>NOT</b></u> the one for future value of an ORDINARY ANNUITY. This should yield: {{{highlight_green("$67,139.58")}}}, as opposed to $64,371.60.
This is the difference between making payments, or depositing at the BEGINNING of a period, instead of at the end of the period.

For the above: 
{{{FV[ad]}}} is:  FUTURE VALUE of an ANNUITY DUE (Unknown, in this case)
PMT is:	    PERIODIC PAYMENT made ($280, in this case)  
"i" is:	    ANNUAL Interest rate (4.3%, or .043, in this case)
m is:	    number of ANNUAL COMPOUNDING periods (12, in this case)
t is:	    Time, in years it takes to reach Future Value (14 years, in this case)