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
+37146 Need to know if deposits are made at the BEGINNING of the month or the END of the month......
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
