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  1. #1
    Member Rimas's Avatar
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    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
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  2. #2
    Forum Admin topsquark's Avatar
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    Quote Originally Posted by Rimas View Post
    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
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  3. #3
    Grand Panjandrum
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    Quote Originally Posted by topsquark View Post
    I'm very confused about the question! What does a savings account have to do with a round table??

    -Dan
    Copy/Paste problem?

    RonL
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  4. #4
    MHF Contributor Quick's Avatar
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    Quote Originally Posted by Rimas View Post
    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?
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  5. #5
    Member Rimas's Avatar
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    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?
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  6. #6
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    Hello, Rimas!

    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.

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