Deposit $300 each month into an account earning 7% interest compounded monthly.
How much total money will you put into the account?
How much total interest will you earn?
You did not state the time period
You deposit $300 each month into an account earning 7% interest compounded monthly.
ummmhhh, for 5 years, for 2 years, for 20 years ???
The question is incomplete.
To find the total amount of money you will put into the account, you need to calculate the monthly deposit amount and then multiply it by the number of months.
Step 1: Calculate the monthly deposit amount.
In this case, you will deposit $300 each month. So the monthly deposit amount is $300.
Step 2: Determine the number of months.
Since you didn't mention the duration for which you will be making deposits, I'll assume it's for a year, or 12 months.
Step 3: Multiply the monthly deposit amount by the number of months.
$300 * 12 = $3,600
Therefore, the total amount of money you will put into the account is $3,600.
To find the total interest you will earn, you can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = Total amount after the specified time period
P = Principal amount (initial deposit)
r = Annual interest rate (7% or 0.07 in decimal form)
n = Number of times the interest is compounded per year (monthly, so n = 12)
t = Number of years
In this case, the principal amount (P) is $300, the annual interest rate (r) is 7% or 0.07, the compounding frequency (n) is 12, and the time period (t) is 1 year.
Step 1: Calculate the value inside the parentheses.
(1 + 0.07/12)^(12 * 1)
Step 2: Simplify the expression inside the parentheses.
(1 + 0.00583)^(12 * 1)
Step 3: Evaluate the expression inside the parentheses.
(1.00583)^(12)
Step 4: Raise the base to the power.
1.0715181697182
Step 5: Multiply the result by the principal amount.
0.0715181697182 * $300 = $21.46 (rounded to two decimal places)
Therefore, the total interest you will earn is approximately $21.46.