If I had £100 contributed every month for 10 years & received a 9% interest each year, what is the formula to work out the answer

Guest Mar 7, 2019

#1**0 **

Need to know if deposits are made at the BEGINNING of the month or the END of the month......

ElectricPavlov Mar 7, 2019

#3**+1 **

FV=P{[1 + R]^N - 1/ R}, where FV=Future Value, P=Periodic Payment, R=Rate of interest, N=Number of periods.

FV=100 x {[1 + 0.09/12]^(10*12) - 1 / (0.09/12)}

FV=100 x {[1.0075]^120 - 1 / (0.0075)}

FV=100 x {[2.4513570 - 1] /(0.0075)}

FV=100 x {[1.4513570] / (0.0075)}

FV=100 x {193.5142770...}

**FV=19,351.43 - Pounds.**

Note: This is what you would have at the end of 10 years or 120 months if deposits are made at the END of each month @ 9% compounded monthly. If the deposits are made at the BEGINNING of each month, then you would have:

**19,351.43 x 1.0075 =19,496.56 - Pounds**

Guest Mar 7, 2019