Results 1 to 3 of 3

Math Help - Saving at the same rate

  1. #1
    Junior Member
    Joined
    Sep 2007
    Posts
    46
    Thanks
    1

    Saving at the same rate

    Hello, i cant seem to wrap my head around this question

    You want to invest 100 dollars every two weeks at 7 percent compounded monthly for the next 40 years. how much money will you have at the end of 40 years?
    its driving me to
    i would like to see a formula for this that does not involve calculating interst on each instance of 100 dollars for a massive chain equation. you can use 200 invested monthly to make it easier since you only earn interest monthly anyways but man i cant think
    Follow Math Help Forum on Facebook and Google+

  2. #2
    MHF Contributor
    Joined
    Aug 2007
    From
    USA
    Posts
    3,110
    Thanks
    2
    Quote Originally Posted by ffezz View Post
    Hello, i cant seem to wrap my head around this question

    You want to invest 100 dollars every two weeks at 7 percent compounded monthly for the next 40 years. how much money will you have at the end of 40 years?
    its driving me to
    i would like to see a formula for this that does not involve calculating interst on each instance of 100 dollars for a massive chain equation. you can use 200 invested monthly to make it easier since you only earn interest monthly anyways but man i cant think
    If you learn basic principles, all the problems look about the same.

    We have i = 0.07
    n = 40*26 = 1040
    i12 = 0.07/12 = 0.00583333.....
    i52 = (1+i12)^(6/13) - 1 = 0.0026880919907
    r = 1+i52
    P = $100
    S = The Desired Accumulation.

    That's all we need. Now build it. Note: Accumulations oftern are easier to build from the back.

    Considering only the last payment, one week later, we have Pr
    The second to last payment is Pr^2
    See the pattern already?

    Pr + Pr^2 + Pr^3 + ... + Pr^n = S

    Pr(1 + r + r^2 + ... + r^(n-1)) = S

    Pr((1 - r^n)/(1 - r)) = S

    Ummm...We're about done. You do the rest.
    Follow Math Help Forum on Facebook and Google+

  3. #3
    MHF Contributor
    Joined
    Aug 2007
    From
    USA
    Posts
    3,110
    Thanks
    2
    Not a single follow up question?!

    Where did I get "6/13" and what does that mean?
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. saving plan exercise
    Posted in the Business Math Forum
    Replies: 1
    Last Post: November 27th 2011, 04:46 PM
  2. Replies: 3
    Last Post: October 1st 2009, 05:06 PM
  3. Saving and investment.
    Posted in the Business Math Forum
    Replies: 7
    Last Post: July 24th 2009, 03:35 AM
  4. Saving Matlab movie
    Posted in the Math Software Forum
    Replies: 0
    Last Post: March 24th 2009, 11:53 AM
  5. Problem with saving account
    Posted in the Business Math Forum
    Replies: 1
    Last Post: April 4th 2007, 07:11 AM

Search Tags


/mathhelpforum @mathhelpforum