katie puts $200 in a bank account at the end of each month . if she earns 9% per annum, compounded monthly determine how much she will have at the end of 4 years? how much interest has she earned?
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samantha -
Katie puts $200 in a bank account at the end of EACH month ... so this is an ANNUITY problem and you use the following annuity formula:
200[ (1+0.09/12)^48 - 1 ] / (0.09/12) = 11504.14 at the end of 4 yrs.
Interest = 11504.14 - (200)(48) = 1904.14
Hope that helps
Katie puts $200 in a bank account at the end of EACH month ... so this is an ANNUITY problem and you use the following annuity formula:
200[ (1+0.09/12)^48 - 1 ] / (0.09/12) = 11504.14 at the end of 4 yrs.
Interest = 11504.14 - (200)(48) = 1904.14
Hope that helps