You decide to contribute to a savings account with an interest rate of 7% compounded monthly. If you contribute monthly deposits of $125 for 10 years

Question

You decide to contribute to a savings account with an interest rate of 7% compounded monthly. If you contribute monthly deposits of $125 for 10 years,

(a) How much will be in the account after 10 years?   

(b) How much did you deposit in total?   

(c) How much total interest did you earn?   

Answer 1

Use the compound interest formula:

A=P(1+r/n)^nt

where P=principal r=rate n=times per year interest is levied

t=number of years.