QuestionJuly 27, 2025

What was the amount that you generated through the compound interest calculator?You invest 1000 and then plan to contribute 50 every month on top of this, earning an annual interest rate of 1.25% 25 1000 1616.02 7520.66

What was the amount that you generated through the compound interest calculator?You invest 1000 and then plan to contribute 50 every month on top of this, earning an annual interest rate of 1.25% 25 1000 1616.02 7520.66
What was the amount that you generated through the compound interest calculator?You invest 1000 and then plan to contribute 50 every month on top of this, earning an annual interest rate of 1.25% 25 1000 1616.02 7520.66

Solution
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Answer

\1616.02 Explanation 1. Identify the formula for compound interest with regular contributions Use the formula A = P(1 + \frac{r}{n})^{nt} + PMT \left(\frac{(1 + \frac{r}{n})^{nt} - 1}{\frac{r}{n}}\right) where P is the initial principal, r is the annual interest rate, n is the number of times interest applied per time period, t is the number of time periods, and PMT is the monthly contribution. 2. Assign values to variables P = 1000, r = 0.0125, n = 12, t = 1, PMT = 50. 3. Calculate the total amount Substitute the values into the formula: A = 1000(1 + \frac{0.0125}{12})^{12 \times 1} + 50 \left(\frac{(1 + \frac{0.0125}{12})^{12 \times 1} - 1}{\frac{0.0125}{12}}\right). 4. Compute the result Calculate each part separately and sum them up to find A.

Explanation

1. Identify the formula for compound interest with regular contributions<br /> Use the formula $A = P(1 + \frac{r}{n})^{nt} + PMT \left(\frac{(1 + \frac{r}{n})^{nt} - 1}{\frac{r}{n}}\right)$ where $P$ is the initial principal, $r$ is the annual interest rate, $n$ is the number of times interest applied per time period, $t$ is the number of time periods, and $PMT$ is the monthly contribution.<br /><br />2. Assign values to variables<br /> $P = 1000$, $r = 0.0125$, $n = 12$, $t = 1$, $PMT = 50$.<br /><br />3. Calculate the total amount<br /> Substitute the values into the formula: <br />$A = 1000(1 + \frac{0.0125}{12})^{12 \times 1} + 50 \left(\frac{(1 + \frac{0.0125}{12})^{12 \times 1} - 1}{\frac{0.0125}{12}}\right)$.<br /><br />4. Compute the result<br /> Calculate each part separately and sum them up to find $A$.
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