Jackson deposits $210 each month into a savings account earning interest at the rate of 7% per year compounded monthly. How much will he have in this account at the end of 6 years?

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- Mar 3rd 2009, 06:59 PMDirtMcGirtFuture Annuity with Compound Interest?
Jackson deposits $210 each month into a savings account earning interest at the rate of 7% per year compounded monthly. How much will he have in this account at the end of 6 years?

- Mar 3rd 2009, 07:45 PMTKHunny
This is almost the same as the other two. Really, throw us a bone, here. You can't have NO idea.

- Mar 3rd 2009, 07:52 PMDirtMcGirt
Sorry - I am confused as to which formula to use. I wanted to make sure this was Future Annuity with Compound Interest. I really DONT know anything lol! I don't know where to start :/

- Mar 4th 2009, 05:22 PMTKHunny
I'm hearing a voice of desperation. You need a voice of hope in your head.

You START with "Basic Principles". Really!! Forget the silly formulas.

Quote:

Jackson deposits $210 each month into a savings account earning interest at the rate of 7% per year compounded monthly. How much will he have in this account at the end of 6 years?

P = 210

"each month"

n = 12

"earning interest at the rate of 7% per year"

i = 0.07

"compounded monthly"

j = i/n = i/12 = 0.00583333

Accumulate One Month

a = 1+j = 1.00583333

I haven't even read the question, yet, and just look at all the stuff that is available! This is how you start. Collect the pertinent data.

"How much will he have in this account at the end of 6 years? "

6 years = 6*n = 72 months

We are ready to build!

P*r^72 + P*r^71 + ... + P*r = S = The desired result.

The rest is algebra.

P*(r^72 + r^71 + ... + r) = S

Your task is to add up the geometric series in the parentheses.

If you cannot do it, you may be in the wrong class. Give it some thought. If all you can do is tell us that you cannot do anything, that is not encouraging and you should have a very clear conversation with your academic advisor. You will not get anywhere here or in school without the necessary background.