Math 1348 Periodic Deposits Fall 2008
Suppose regular deposits are made into a savings or retirement account paying compound
interest. In each case, determine
(a) What the total balance would be after the given time period,
(b) How much of the balance is from the deposits, and
(c) How much of the balance is from interest.
Assume that the deposits are made at the beginning of each interest pay period (for example,
at the beginning of each month if interest is compounded monthly.) All of the interest rates
are annual rates here.
1. $50 per month into an account paying 3% interest compounded monthly for 10 years.
2. $50 per month into an account paying 3% interest compounded monthly for 20 years.
3. $50 per month into an account paying 3% interest compounded monthly for 30 years.
4. $50 per month into an account paying 6% interest compounded monthly for 30 years.
5. $600 per year into an account paying 6% interest compounded annually for 30 years.
6. $20 per week into an account paying 5% interest compounded weekly for 5 years.
7. $50 per week into an account paying 4% interest compounded weekly for 10 years.
8. $1,000 per year into an account paying 8% interest compounded annually for 20 years.
Final answers:
1. (a) $7,004.54, (b) $6,000, (c) $1,004.54
2. (a) $16,456.14, (b) $12,000, (c) $4,456.14
3. (a) $29,209.69, (b) $18,000, (c) $11,209.69
4. (a) $50,476.88, (b) $18,000, (c) $32,476.88
5. (a) $50,281.01, (b) $18,000, (c) $32,281.01
6. (a) $5,910.20, (b) $5,200, (c) $710.20
7. (a) $31,978.28, (b) $26,000, (c) $5,978.28
8. (a) $49,422.92, (b) $20,000, (c) $29,422.92
