Is this answer correct?
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$
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
To determine the amount Jeremy will have at the end of five years, we need to calculate the compound interest.
In this case, the formula for compound interest is:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment (the amount Jeremy will have at the end of five years)
P = the principal amount (the initial amount Jeremy puts into the account, which is $100 per month)
r = the annual interest rate (6% or 0.06)
n = the number of times the interest is compounded per year (monthly, so n = 12)
t = the number of years (five years in this case)
Plug in the values into the formula:
A = (100)(1 + 0.06/12)^(12 × 5)
Simplify the equation:
A = (100)(1 + 0.005)^(60) = 100(1.005)^(60)
Calculating the exponential part:
(1.005)^(60) ≈ 1.33822557789
Multiply by the principal amount:
A ≈ 100 × 1.33822557789 ≈ $133.82
Therefore, Jeremy will have approximately $133.82 at the end of five years for his college education.