Question

You deposit $400 each month into an account earning 5% 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

Answer:

amount in 30 years is $1787.0977

interest is $1387.0977

Step-by-step explanation:

Given data

principal amount = $400

rate = 5 % = 0.05

time period = 30 years

to find out

amount in 30 years and total interest

Solution

we know its interest compounded monthly so n = 12

and interest compounded monthly formula is

amount = principal $(1+r/n)^{nt}$   ............1

put the value principal , n , rate and time in equation 1

we get amount

amount = 400 $(1+0.05/12)^{360}$

amount = 1787.0977

amount in 30 years is $1787.0977

and interest = amount - principal  ............2

put the value amount and principal in equation 2

we get  interest = $1787.0977 - $400

interest =$1387.0977