Regular deposits balance formula
The formula for the account balance, assuming regular deposits at the end of each month, is as follows
Here t is the number of deposits, and r is the monthly interest rate APR/12 expressed as a decimal.
Vary the amount of deposit, the number of deposits, and the annual percentage rate to see your balance changing by month over the indicated
time period.
Scroll the “Balance after n deposits” to follow your balance at each month.
0,0
5
10
15
20
0
0.7
1.4
2.1
2.8
3.5
4.2
4.9
5.6
6.3
7
Million of Dollars
Year
Balance after 241 deposits:
$5.94 million
Questions
1. Is the value of your money increasing at a linear or exponential rate? How can you tell?
2. If you want to retire in 30 years with a nest egg of $1 million, what is lowest APR you need for your account if you can afford monthly deposits of $200?
3. If you plan to make 300 total monthly deposits in an account earning 5% APR, at what deposit number will you be halfway to your nest egg goal?
2. If you want to retire in 30 years with a nest egg of $1 million, what is lowest APR you need for your account if you can afford monthly deposits of $200?
3. If you plan to make 300 total monthly deposits in an account earning 5% APR, at what deposit number will you be halfway to your nest egg goal?