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March 29, 2017

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Jeremy is in Grade 8. He has a paper route and wants to save for his college education. He determines that he has $100 per month to put into an account at 6%/a compounded monthly. How much will he have at the end of five years for his college education?

n = 12 x 5 = 60
R = 100
I = 0.06/12 = 0.005

Time
(Years) Amount of money at the beginning of the year Interest for the year New amount of money by the end of the year
1 n/a n/a 1200$
2 1200$ 1200[0.6][12] = 86.40 1286.40$
3 1286.40$ 1286.40[0.6][12] = 92.62 1379.02$
4 1379.02$ 1379.02[0.6][12] = 99.29 1478.31$
5 1478.31$ 1478.31[0.6][12] = 106.44 1584.75$

  • Math - ,

    I had given you the formula to use in
    http://www.jiskha.com/display.cgi?id=1295098022

    I don't understand what you are doing in your post

    I gave you
    amount = payment [(1+i)^n - 1]/i , so ....
    = 100 (1.005^60 - 1)/.005
    = 6977.00

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