Austin S. answered • 08/16/16

Tutor

New to Wyzant
Relaxed, attentive, and flexible tutor willing to help you learn

You can model this with a recursion equation.

V

_{n}= V_{n-1}* (1.03) + 100with V

_{0}= 100. Basically, the value of the account at any given month, n, is the value of the previous month multiplied by 1.03 and increased by 100. Recursion equations are easily modeled in excel! Try this: type in your initial value, 100, into cell A1. In Cell A2, type =A1*1.03+100. Drag the equation down and each cell will fill with the value for each month. At 20 years, or 240 months, you would have $4133327.356.