The detailed answer provides calculations for the future value of the account, total deposits, and total interest earned over 25 years with monthly deposits and compound interest.
a) How much will you have in the account in 25 years?
To calculate the future value with monthly deposits, you can use the formula for compound interest: Future Value = P((1 + r)^n - 1) / r, where P is the monthly deposit amount, r is the monthly interest rate, and n is the total number of deposits. Plugging in the values, after 25 years, you would have approximately [tex]$118,123.68 in the account.
b) How much total money will you put into the account?
The total amount deposited can be calculated by multiplying the monthly deposit by the number of months: Total Deposits = Monthly Deposit Number of Months. In this case, the total amount deposited over 25 years would be $[/tex]90,000.
c) How much total interest will you earn?
The total interest earned can be found by subtracting the total deposits from the future value: Total Interest = Future Value - Total Deposits. Therefore, the total interest earned over 25 years would be $28,123.68.
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