Suppose a particular bank gives 5% interest on its savings accounts, compounded monthly. If one opens a savings account and deposits $ 200 each month for a total of 12 years, how much money will be in the account after the last deposit is made? Please help!

Question

hero · Answer

Do you know the formula for compound interest?

anonymous · Answer

It's A=P(1+r) correct?

anonymous · Answer

A=200(1+.05/12)^12(2) ?

hero · Answer

Most Excellent

hero · Answer

What do you get?

anonymous · Answer

I got a repeating number, did you?

hero · Answer

Wait a second. I just realized that this is different. It says 200 dollars is added each month, so this is different.

anonymous · Answer

Oh no you're right!

hero · Answer

You'll just have to use the equation you posted but calculate it 24 times, but replacing P with the new amount each time. I am not able to come up with a general formula

anonymous · Answer

Would I simply multiply my answer by 24?

hero · Answer

No, because each month, the interest is compounded, so you can't just multiply by 24

hero · Answer

I'm looking for a general formula

anonymous · Answer

Sorry I'm getting a bit confused. So I would add the equation 24 times basically?

hero · Answer

No, because each time you compound the interest, P will increase by 1.05

anonymous · Answer

Oh okay woops sorry