Jackson deposits $160 each month into a savings account earning interest at the rate of 8% per year compounded monthly. How much will he have in this account at the end of 7 years?
a) $17,940.13
b) $17,938.13
c) $17,937.13
d) $17,936.13
e) $17,934.13
f) None of the above.

Question

Jackson deposits $160 each month into a savings account earning interest at the rate of 8% per year compounded monthly.  How much will he have in this account at the end of 7 years?
a) $17,940.13
b) $17,938.13
c) $17,937.13
d) $17,936.13
e) $17,934.13
f) None of the above.

mathmate · Answer

monthly interest, i = 0.08/12
monthly deposit, D = 160
number of periods(months), n  = 7*12 = 84
Final amount, A
$$ A = \frac{D(1+i)^n - 1)}{i} $$