# ASSIGNMENT 12

A spreadsheet can be used to estimate growth of a savings account after 30 years when the initial deposit is \$1000 and it grows at 5.9% interest compounded monthly.

 Year Account Balance 1 1060.62 2 1124.92 3 1193.11 4 1265.44 5 1342.15 6 1423.52 7 1509.82 8 1601.34 9 1698.42 10 1801.38 11 1910.58 12 2026.41 13 2149.25 14 2279.54 15 2417.73 16 2564.30 17 2719.76 18 2884.63 19 3059.50 20 3244.98 21 3441.69 22 3650.34 23 3871.62 24 4106.33 25 4355.27 26 4619.29 27 4899.32 28 5196.33 29 5511.34 30 5845.45

The following compound interest formula was used to determine the amounts at the end of each year:

The spreadsheet was able to calculate the amounts, A, given the values P = 1000, r = .059, n = 12, and t was assigned the values in the year column.

Suppose interest was compounded yearly at 12.5% using the same principal amount (r = .125, n = 1):

 Year Account Balance 1 1125.00 2 1265.62 3 1423.83 4 1601.81 5 1802.03 6 2027.29 7 2280.70 8 2565.78 9 2886.51 10 3247.32 11 3653.24 12 4109.89 13 4623.63 14 5201.58 15 5851.78 16 6583.25 17 7406.16 18 8331.92 19 9373.42 20 10545.09 21 11863.23 22 13346.13 23 15014.40 24 16891.20 25 19002.60 26 21377.93 27 24050.17 28 27056.44 29 30438.49 30 34243.30

WOW!

Suppose in the original problem, the interest was compounded daily (n = 365):

 Year Account Balance 1 1060.77 2 1125.23 3 1193.61 4 1266.15 5 1343.09 6 1424.71 7 1511.29 8 1603.14 9 1700.56 10 1803.90 11 1913.52 12 2029.81 13 2153.16 14 2284.01 15 2422.81 16 2570.04 17 2726.23 18 2891.90 19 3067.64 20 3254.06 21 3451.81 22 3661.58 23 3884.10 24 4120.13 25 4370.51 26 4636.11 27 4917.85 28 5216.71 29 5533.73 30 5870.01