in order to save for his senior high school graduation, Philip decided to save 500 pesos at the end of each month. If the bank pays 0.35% compounded monthly, how much will his money be at the end of 5 years? [GENMATH]
Answers
Given : , Philip decided to save 500 pesos at the end of each month
the bank pays 0.35% compounded monthly, how much will his money be at the end of 5 years
To Find : how much will his money be at the end of 5 years
Solution :
A = P(1 + R/100)ⁿ
Amount deposited at end of 1 st month wil be = 500(1 + 0.35/100)⁵⁹
Amount deposited at end of 2nd month wil be = 500(1 + 0.35/100)⁵⁸
Amount deposited at end of 5th year wil be = 500(1 + 0.35/100)⁰ = 500
500 + 500(1 + 0.35/100) + ___ + ____ + 500(1 + 0.35/100)⁵⁸ + 500(1 + 0.35/100)⁵⁹
a = 500
r = 1 + 0.35/100 = 1.0035
n = 60
Sₙ = a(rⁿ - 1)/(r - 1)
= 500((1.0035)⁶⁰ - 1)/(1.0035 - 1)
= 33,317.97
= 33318 Rs
money at the end of 5 years = 33318 Rs
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