Question 1193605
.
Anjo wants to buy a quality television set within a year. He decides to
make regular deposits ₱2,500 monthly where the money will earn 5%
compounded monthly. How much will he have in his savings one year after?
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<pre>
It is about calculating future value of an Ordinary Annuity saving plan. The general formula is 


    FV = {{{P*(((1+r)^n-1)/r)}}},    (1)


where  FV is the future value of the account;  P is the monthly payment (deposit); 1+r is the monthly growth coefficient; 
n is the number of deposits.


Under the given conditions, P = 2500;  r = 0.05/12;  n = 12.  So, according to the formula (1), Anjo gets at the end of the year


    FV = {{{2500*(((1+0.05/12)^12-1)/((0.05/12)))}}} = P30697.14.


Note that Anjo deposits only  12*P2500 = P30,000.  The rest is what the account earns/accumulates in 12 months.
</pre>

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On Ordinary Annuity saving plans, &nbsp;see the lessons

&nbsp;&nbsp;&nbsp;&nbsp;- <A HREF=http://www.algebra.com/algebra/homework/Sequences-and-series/Ordinary-Annuity-saving-plans-and-geometric-progressions.lesson>Ordinary Annuity saving plans and geometric progressions</A>

&nbsp;&nbsp;&nbsp;&nbsp;- <A HREF=https://www.algebra.com/algebra/homework/Sequences-and-series/Solved-problem-on-Ordinary-Annuity-saving-plans.lesson>Solved problems on Ordinary Annuity saving plans</A>

in this site.


The lessons contain &nbsp;EVERYTHING &nbsp;you need to know about this subject, &nbsp;in clear and compact form.


When you learn from these lessons, &nbsp;you will be able to do similar calculations in semi-automatic mode.