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1 October, 07:50

Suppose you invest $150 a month for 5 years into an account earning 7% compounded monthly. After 5 years, you leave the money, without making additional deposits, in the account for another 23 years. How much will you have in the end?

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  1. 1 October, 10:43
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    About 0.3 billion dollars

    Step-by-step explanation:

    5 years = 60 months.

    The 150 of the first month will be 150*1.07^60 in 5 years.

    The 150 of the second month will be 150*1.07^59 in 5 years.

    The 150 of the third month will be 150*1.07^58 in 5 years.

    And so forth.

    So we sum that up:

    (sum_ (n=1) ^ (60) 150*1.07^n)

    And multiply with

    * 1.07^ (5*23)

    to account for the increase in value in the following 23 years.
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