Question

Louie plans on depositing $200 per month into an account that earns 4% APR until he is 65, he is currently 45. What would be the total amount of money he deposited, balance at age 65 using the TVM solver, and the amount of interest earned.

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PMT: End   

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

B N 20 4% PV PMT No. of Years APR Present value (Current balance) Monthly Deposit Future value Payment in a year Compounding in a year $200.00 $73,354.93 FV P/Y 12 с/х 12 Balance at age of 65 Total Amount deposited Interest earned $73,354.93 $48,000.00 $25,354.93

Cell reference -

в N =65-45 0.04 PV No. of Years APR Present value (Current balance) Monthly Deposit Future value Payment in a year Compounding in a year PMT FV P/Y c/Y 200 =FV(D3/D8,D2*D7,-D5,D4,0) 12 12 Balance at age of 65 Total Amount deposited Interest earned =D6 =D5*D2*D7 =D10-D11

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.