If Jackson deposited $400 at the end of each month in the saving account earing interest at the rate of 6%/year compounded monthly, how much will he have on deposite in his savings account at the end of 6 years, assuming that he makes no withdrawals during that period? Round your answers to two decimal places.
We can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where A is the final amount, P is the principal (initial amount), r is the annual interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the time in years.
In this case, we have P = $400 (Jackson's monthly deposit), r = 0.06 (6% annual interest rate), n = 12 (compounded monthly), and t = 6 (years).
We first need to find the total number of compounding periods:
n*t = 12*6 = 72
Now we can plug in the values and calculate the final amount:
A = 400(1 + 0.06/12)^(72) = $31,701.85
Therefore, Jackson will have $31,701.85 in his savings account at the end of 6 years.