I've been circling his problem for a little while and cannot find how to approach it.(adsbygoogle = window.adsbygoogle || []).push({});

A typical smoker spends 55 dollars a month on cigarrettes. Suppose that the smokers invest at the end of the month that same amount in a savings account at 4.8% compounded monthly. How much money will be in the account at the end of 40 years?

I translated that from spanish so it might be a little unclear, polease dont hesitate to ask for clarifycation.

I know that the compound interest formula is A= P(1+(r/n)^nt but the problem is that everytime I make a deposit I have to add last month amount with interest plus this months amount and it keeps mounting every month. I think the problem lies in P. I Tried plugging in all the numbers and if I invest only the first 55 dollars I will have 2305.60 at the end of the 40 years but I know thats wrong, as the real amount should be much higher. Any push in the right direction would me appreciated greatly. Thanks

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# Homework Help: Cigarretes are expensive!(compound interest problem)

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