Question

Hamilton is saving for retirement. He deposits $275 each month at 2.6% annual interest for 30 years. According to his calculations, at the end of 30 years he should have $149,722,57 in his account. How much of this did Hamilton contribute and how much of this is interest?

Answer 1

After saving for 30 years, Hamilton would have contributed $99,000 and made a total interest of $50,722.57.

Hamilton will indeed have $149,722.57 at the end of 30 years.

Out of this, the amount he would have contributed is:

= Amount contributed per month x Number of months contributed

= 275 x 30 years x 12 months

= $99,000

The amount that would be interest is:

= Total amount accumulated - Amount contributed

= 149,722.57 - 99,000

= $50,722.57

In conclusion, Hamilton would have contributed $99,000 and made $50,722.57 in interest.

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