Compound interest again?

Question

What is $270.93 invested per month for 48 months @ 8% per annum compounded monthly? Plz show calculations

Answer 1

First off all you need to calculate the monthly interest rate. This is going to be 8%/12 or .666666....%

Now the 270.93 you invest in the first month is going to be worth 270.93*(1.06666666...)^48 at the end.

The 270.93 in month 2 is going to be worth 270.93*(1.06666666...)^47 at the end.

The 270.93 in month j is going to be worth 270.93*(1.06666666...)^(49-j) at the end.

The 270.93 in month 48 is going to be worth 270.93*(1.06666666...)^1 at the end.

You are going to have to add these totals for j is 1 to 48. This is the sum of a geometric series and the total is

270.93* ((1.06666666...)^(48+1) - (1.06666666...)) / (1.066666...-1)

This comes out to 15368.66

Answer 2

The formula is
A = P*(1+rate/100)^time
where A = Amount
P = Principal
rate = rate of interest
time = time in years
In the question:
P = 270.93$
Rate = 8% p.a.
Time = 48/12 = 4 years
Substituting values
A = 270.93*(1+8/100)^4
= 270.93*(108/100)^4
This is the amount that you will recive on the principal amount.
The compound interest will be: A-P.

Answer 3

Amt = Principal (1 + i)^n

where i is periodic interest rate and n is number of periods.

You must present the interest rate in monthly terms as shown below because of the monthly compounding.

Amt = 270.93(1 + 0.08/12)^48

Amt = 270.93 * 1.3756661

Amt = $372.91
.

Answer 4

Amount invested = $11,097.81
Interest Earned = $1,906.83
Total Amount = $13,004.64

I can't show you calculations. I have a program that does this for me