Thread: Compound Interest

I am currently working on mastering mathematics book and wanted to brush up on my maths, since it has been nearly 15years i have tried mathematics. I am struggling with a problem. Hope someone would help me with solving this.
Question:
Roy invests 1000pounds on 1jan1996 and every 1jan until 1jan2006. Interest at 8%per annum is calculated at31december each year on the total value of his investment(including any earned interest). What will be the value of his investment on 31 december 2006?
I have found the answer to that i got to be different from the answer at the back of the text and wanted to know if i am right. So i need a bit of a help.

Thank You

Kat

Originally Posted by psykat09

I am currently working on mastering mathematics book and wanted to brush up on my maths, since it has been nearly 15years i have tried mathematics. I am struggling with a problem. Hope someone would help me with solving this.
Question:
Roy invests 1000pounds on 1jan1996 and every 1jan until 1jan2006. Interest at 8%per annum is calculated at31december each year on the total value of his investment(including any earned interest). What will be the value of his investment on 31 december 2006?
I have found the answer to that i got to be different from the answer at the back of the text and wanted to know if i am right. So i need a bit of a help.

Thank You

Kat

1000*(1.08)^11

Originally Posted by biffboy

1000*(1.08)^11

This does not account for investing additional $1000 every January 1.

Originally Posted by psykat09

Roy invests 1000pounds on 1jan1996 and every 1jan until 1jan2006. Interest at 8%per annum is calculated at31december each year on the total value of his investment(including any earned interest). What will be the value of his investment on 31 december 2006?

Do you need an analytical formula or a numerical answer? Do you have to calculate it by hand, using a calculator, or using software? If you are using Excel or LibreOffice, do you need to use built-in functions or set up your own formulas?

Originally Posted by psykat09

I have found the answer to that i got to be different from the answer at the back of the text and wanted to know if i am right.

It's a good idea to show your work so that we can discuss it. In fact, the forum rules say that you need to show some work or describe the difficulty you are having.

My mistake. Must read the questions more carefully!
So answer will be 1000*(1.08)^11 +2000*(1.08)^10 +3000*(1.08)^9...........+11000(1.08)

I tried this problem by using the formula I=P(1=R/100)^n
I found the answer to be 21589.249
It is however different from the answer at the back of the book which is 1797713

Originally Posted by psykat09

I tried this problem by using the formula I=P(1=R/100)^n

Just like post #2, this does not take into account additional investments of $1000 every January 1.

You have not responded to questions in post #3.