Question

Don opened a retirement account with an APR of 3.25% compounded monthly. He is planning to retire in 15 years. About how much will he have in the account when he retires if he deposits $750 a month? Include your work as best as possible. *

Answer 1

So, the required amount is $27655.384.

Compound Interest:

The formula for finding the compound interest is ,

$A=\frac{P((1+\frac{r}{n} )^{nt}-1)}{\frac{r}{n} } ...(1)$

Consider the periodic deposit amount $p=\ 750$

Rate$r=3.25\%$

Consider the time $t=15 years$

$n=12$

Substituting the given values into the above formula we get,

$A=\frac{750((1+\frac{0.325}{12} )^{12\times 15 }-1)}{\frac{0.325}{12} }\\A =\ 27655.384$

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