I need to figure out what a deposit of 3500 a month, with 9 percent intrest compounded monthly, would be in 6 years. Any help would be greatly appreciated.
$3500 * (1.0075)^72 = $5,993.93
The balance is increased by a factor
1 + (0.09/12), each month for 72 months.
Determine the number of months required for a deposit of $3500 to earn $262.75 simple interest at 7.35%
To calculate the future value of a deposit with compound interest, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A is the future value of the deposit
P is the initial amount (the deposit)
r is the annual interest rate (as a decimal)
n is the number of times the interest is compounded per year
t is the number of years
In this case, the deposit is $3500 per month, so the initial amount (P) is $3500. The annual interest rate (r) is 9 percent, which needs to be converted to a decimal, so r = 0.09. The interest is compounded monthly, so n = 12. Finally, you want to find the future value in 6 years, so t = 6.
Substituting these values into the formula, we get:
A = 3500(1 + 0.09/12)^(12*6)
Now let's evaluate the expression step by step:
1. Calculate the value inside the parentheses:
0.09/12 = 0.0075
2. Add 1 to the result:
1 + 0.0075 = 1.0075
3. Calculate the exponent (12*6 = 72):
1.0075^72 ≈ 1.759
4. Multiply the initial deposit by the result:
3500 * 1.759 ≈ $6,156.50
Therefore, after 6 years, a deposit of $3500 per month with a 9% interest rate compounded monthly will amount to approximately $6,156.50.