Problema Solution
You put $350 per month in an investment plan that pays an APR of 3.5% compounded monthly. How much will you have after 18 years? Compare this amount to the total deposits made over the time period. Assume an ordinary annuity.
Answer provided by our tutors
let
P = $350 the principal invested
r = 0.035 or 3.5% annual interest rate
t = 18 years
n = 12*t = 12*18 = 216 compounding periods (the account is compounded monthly)
A = future value
A = P(1 + r/12)^n
A = 350(1 + 0.035/12)^216
A = $656.56
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After 18 years there will be $656.56.