You are to make monthly deposits of $300 into a retirement account that pays 11% interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 20 years?

On the BAII:

P/Y=C/Y=12

Make sure mode set to END

CLR TVM

240 N 11 I PMT 300 CPT FV (I don’t have my calculator on me, but FV should be 259,691.49)

Who cares?

I want to know where you find a retirement account that pays 11% interest!

After 1 month, you owe the bank 6,000 * (1+0.019/12) = 6,009.50. Now you don’t have to do this calc 12 times: you can treat it as 2 different accumulation periods.

@S2000magician : I bet this Shady Bank outfit offers that 11% retirement savings account!!!

Have you tried to do it?

I’d be more inclined to believe that if the question mentioned that for every monthly payment missed there was a $100 fee charged, which is added to the balance and immediately accrues interest.

I got the answer using

N=6

I/y= 1.9%/6

PV=6000

PMT= 0

FV= 6057.23

After which i use it until i get the interest 558.23.

So far, so good.

You omitted a couple of steps here, but your answer’s correct.