# Need Help

• Sep 30th 2006, 08:12 AM
Rimas
Need Help
A round table can be made square by dropping the four leavAt the end of everymonth Elle Deposits \$500 into a savings account,with an anual interest rate of 6% compounded monthly.How much interrest will be earned at the end of 4 years?

I am very confused about what to do
• Sep 30th 2006, 12:27 PM
topsquark
Quote:

Originally Posted by Rimas
A round table can be made square by dropping the four leavAt the end of everymonth Elle Deposits \$500 into a savings account,with an anual interest rate of 6% compounded monthly.How much interrest will be earned at the end of 4 years?

I am very confused about what to do

I'm very confused about the question! What does a savings account have to do with a round table??

-Dan
• Sep 30th 2006, 12:30 PM
CaptainBlack
Quote:

Originally Posted by topsquark
I'm very confused about the question! What does a savings account have to do with a round table??

-Dan

Copy/Paste problem?

RonL
• Sep 30th 2006, 01:17 PM
Quick
Quote:

Originally Posted by Rimas
A round table can be made square by dropping the four leavAt the end of everymonth Elle Deposits \$500 into a savings account,with an anual interest rate of 6% compounded monthly.How much interrest will be earned at the end of 4 years?

I am very confused about what to do

I assume you were asking the question that's highlighted, and then decided to ask the composite interest problem?
• Sep 30th 2006, 07:20 PM
Rimas
Sry about that a typing error this is the real question
:At the end of everymonth Elle Deposits \$500 into a savings account,with an anual interest rate of 6% compounded monthly.How much interrest will be earned at the end of 4 years?
• Sep 30th 2006, 07:36 PM
Soroban
Hello, Rimas!

Quote:

At the end of every month, Elle deposits \$500 into a savings account
with an annual interest rate of 6% compounded monthly.
How much interest will be earned at the end of 4 years?

This is an annuity problem which has this formula:

. . . . . . . . .(1 + i)^n - 1
. . A . = . D ----------------
. . . . . . . . . . . . . i

where D is the periodic deposit, i is the periodic interest rate,
. . n is the number of periods, and A is the final balance.

This problem has: D = \$500, i = 6%/12 = 0.005, n = 47 *

. . . . . . . . . . . . . . . 1.005^47 - 1
We have: . A .= .500 ---------------- . .\$26,416.83
. . . . . . . . . . . . . . . . . .0.005

The final balance is: .\$26,416.83 + 500 .= .\$26,916.83 **

Since she deposited 48 x \$500 .= .\$24,000
. . the interest is: .\$26,916.83 - 24,000 .= .\$2,916.83

*
Since the deposits are made at the end of each period,
. . there are 47 compounding periods.

**
The last deposit is made at the end of the 48th month.
It draws no interest but is still part of the final balance.