Question

You deposit $300 each month into an account earning 2% interest compounded

monthly.
a) How much will you have in the account in 30 years?
b) How much total money will you put into the account?
c) How much total interest will you earn?

Answer 1

a) you will have approximately $133,381.85 in the account in 30 years.

b) a total of $108,000 into the account over 30 years.

c) a total of $25,381.85 in interest over 30 years.

Explanation:

Answer 2

a) The future value of the account after 30 years can be calculated using the formula:

FV = P * ((1 + r/n)^(n*t))

where P is the monthly deposit, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time in years.

In this case, P = $300, r = 0.02, n = 12 (monthly compounding), and t = 30. Plugging these values into the formula, we get:

FV = $300 * ((1 + 0.02/12)^(12*30)) = $150,505.60

So you will have $150,505.60 in the account after 30 years.

b) The total amount of money you will put into the account is simply the monthly deposit multiplied by the number of months in 30 years, which is 30*12 = 360 months. So the total amount of money you will put into the account is:

$300 * 360 = $108,000

c) The total interest earned can be calculated by subtracting the total amount deposited from the future value of the account. So the total interest earned is:

$150,505.60 - $108,000 = $42,505.60