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Homework Help: Need an formula/equation for this scenario

  1. Dec 18, 2008 #1
    1. The problem statement, all variables and given/known data
    I invest 600 every year for 8% compound interest
    for etc. first yr 600* 1.08= 648

    2nd yr
    600+648= 1248
    1248*1.08= 1347.84

    3rd yr
    1347.84+600=1947.84
    1947*1.08=2102.74

    and so on

    2. Relevant equations

    compounded interest formula is

    P is the principal (the money you start with, your first deposit)

    r is the annual rate of interest as a decimal (5% means r = 0.05)

    n is the number of years you leave it on deposit

    A is how much money you've accumulated after n years, including interest.

    If the interest is compounded once a year:

    A = P(1 + r)power of n

    3. The attempt at a solution

    i attempted A= nP(1+r)power of n

    but there's some difference in the answers im getting

    please help correct my formula
     
  2. jcsd
  3. Dec 18, 2008 #2
    nvm i got it

    P = sum deposited at the end of each year (beginning one year from when the annuity "starts")

    r = the interest rate, as a decimal (5%, for example, is r = 0.05)

    n = number of years the annuity has run

    N = total amount accumulated at the end of n years.

    N = (P/r)( (1 + r)n - 1)
     
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