Finance Math: Annuities

[sportywarbz]

Lauren plans to deposit $5000 into a bank account at the beginning of next month and $200/month into the same account at the end of that month and at the end of each subsequent month for the next 5 yr. If her bank pays interest at a rate of 6%/year compounded monthly, how much will Lauren have in her account at the end of 5 yr? (Assume she makes no withdrawals during the 5-yr period. Round your answer to the nearest cent.)

Which equation should I use?

 

[Denis]

Hmmm....you're not giving up, I see :wink:

OK: the 200 monthly deposits accumulate to 13,954.01 ; you got that ok in your other post.

The 5000 is deposited at beginning, and earns interest for the 5 year period;
the future value formula for amount A is: FV = A(1 + i)^n ; yes, it's that simple! So:
5000(1 + .06/12)^60 = 6744.25

Soooooooo: 13,954.01 + 6,744.25 is your answer.

Ya'll ok now?