How do you calculate the total sum from an investment stream?
Mr. Green wishes to invest $ 150 per month in a bank that will pay him interest monthly. The annual percentage interest rate offered by the bank for investment streams is 8.4%.
If Mr. Green invests $ 150 each month for the next ten years, how much money will he have in the bank at the end of then years?
Would appreciate an explanation rather than just a figure as I can't seem to be able to get the formula quite right. Thanks!
Investment best answer:
Answer by jeff410
This is an annuity and you want to know the future value. This is the formula to use.
FVoa = PMT [((1 + i)n - 1) / i]
FVoa = Future Value of an Ordinary Annuity
PMT = Amount of each payment 150
i = Interest Rate Per Period 8.4
n = Number of Periods 10
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