How can I calculate my savings with varying deposits using the interest formula?

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SUMMARY

The discussion focuses on calculating savings with varying deposits using the formula A=d((1+i)^n-1)/i, where 'd' represents uniform deposits, 'i' is the interest rate divided by the number of compounding periods per year, and 'n' is the total number of compounding periods. A specific scenario is presented involving an initial deposit of $5000 followed by uniform deposits in each compounding period. The proposed solution involves applying the savings formula iteratively for each deposit, adjusting the time variable for each subsequent deposit to account for the different compounding periods.

PREREQUISITES
  • Understanding of compound interest calculations
  • Familiarity with the savings formula A=d((1+i)^n-1)/i
  • Basic knowledge of financial mathematics
  • Ability to manipulate algebraic equations
NEXT STEPS
  • Research how to apply the savings formula for multiple deposits
  • Learn about the impact of different compounding frequencies on savings
  • Explore financial calculators that handle varying deposit scenarios
  • Study advanced topics in financial mathematics, such as annuities and perpetuities
USEFUL FOR

This discussion is beneficial for students in finance, individuals managing personal savings, and anyone interested in understanding the effects of varying deposits on compound interest over time.

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Homework Statement



Using the following savings formula, where d is a uniform deposit, i= (interest rate)/(# times compounded per year), n is the total times compounded.

As I understand it, this formula will tell me how much I will have after depositing a certain amount of money per compounding period given an interest rate and time.

How can I take into account the situation where I start off by depositing a large sum like $5000, and then make uniform deposit during every compounding period?

Homework Equations



I am using the savings formula,

A=d(\frac{(1+i)^n-1}{i})

The Attempt at a Solution

 
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Use that formula one the first amount, the same formula, with the time one month less, on the amount deposited for the second month, the formula with the time two months less for the amount deposited on the third month, etc. and then add them all.
 

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