You open a savings account to save retirement. Every month you put $100 into a s

Question

You open a savings account to save retirement. Every month you put $100 into a savings account which pays 8% interest compounded monthly. At the end of each year you receive a $500 bonus which you place directly into your retirement fund. How much is in this account after 40 years? Please do not show Excel formulas. I am looking for a standard set of equations that can be done with a simple calculator or by hand. Thanks. Will rate fast for easily understandable answers. Please dont respond if your answer is $24320.

Explanation / Answer

interest = 8/12 = 2/3 % 0.667%

No. of months = 40*12 = 480

FV = 100(1.0067)^480 + 100(1.0067)^479+100(1.0067)^478+......100(1.0067)

=100(1.0067)^480[1-0.0067^-480]/(1-1/0.0067)

=$355534.3382

Amount = $355534.3382+40*500 = $375,534.3382

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