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9 December, 18:36

A savings account earns 6% (APR) interest calculated monthly, paid into the account at the end of 6 months. Travis deposits $100 into the account at the beginning of the first month. At the end of each month, he deposits an additional $100 into the account. How much interest will Travis have earned after 6 months?

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  1. 9 December, 19:05
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    The monthly increase can be written as a multiplier = 100%+6% = 106% = 1.06

    End of month 1 = 100*1.06 = 106

    Beginning of month 2 = 106+100 = 206

    End of month 2 = 206*1.06 = 212

    Beginning of month 3 = 212+100 = 312

    End of month 3 = 312*1.06 = 330.72

    Beginning of month 4 = 330.72+100 = 430.72

    End of month 4 = 430.72*1.06 = 455.8

    Beginning of month 5 = 555.8

    End of month 5 = 555.8*1.06 = 589.148

    Beginning of month 6 = 689.148

    End of month 6 = 689.148*1.06 = 624.49688

    The amount of interest Travis will receive at the end of month 6 is

    624.49688 - 600 = 24.49688 ≈ $24.50
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