In order to accumulate enough money for a down payment on a house, a couple deposits $758 per month into an account paying 6% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 7 years?

1 Answer
Mar 17, 2017

Answer:

About $79,000, but I wonder if this question is in the right category.

Explanation:

#A=R*[(1+r/n)^(nt)-1]/(r/n)# is the annuity formula, which is what you'd use for regular payments being made over the course of time

r=0.06 (r is the interest rate as decimal)
R=$758 (R stands for the monthly payment)
n=12 because 12 payments per year
t = 7 for 7 years

#A=758*[(1+.06/12)^(12*7)-1]/(.06/12)#

#A=758[(.5204]/(.005)]=$78,892.54#