To calculate the amount of money you will have after 27 years in the savings plan, we will use the future value of a savings plan formula:

$FV = P \times \frac{(1 + \frac{r}{n})^{nt} - 1}{\frac{r}{n}}$

Where:

• $FV$ = future value of the investment
• $P$ = monthly deposit ($300 per month)
• $r$ = annual interest rate (4.5% or 0.045 in decimal form)
• $n$ = number of times the interest is compounded per year (monthly, so $n = 12$)
• $t$ = number of years (27 years)

Step 1: Plug the values into the formula.

$FV = 300 \times \frac{(1 + \frac{0.045}{12})^{12 \times 27} - 1}{\frac{0.045}{12}}$

Now let's calculate it. I'll perform the calculation to get the future value.The future value of your investment after 27 years will be approximately $189,011.52.

Part 2: Compare to the total deposits made.

Now, let's calculate the total deposits. The total amount deposited is simply the monthly deposit multiplied by the number of months:

$\text{Total Deposits} = P \times n \times t$

Let me calculate that for you.The total amount you will have deposited over 27 years is $97,200.

Summary:

• Future value of the investment after 27 years: $189,011.52
• Total deposits made: $97,200

Thus, your investment plan will grow significantly due to interest, earning you approximately $91,811.52 in interest over the 27 years.

Would you like further details or have any questions?

Here are 5 related questions to explore:

1. How does increasing the APR affect the future value of the investment?
2. What happens if you increase the monthly deposit to $400 instead of $300?
3. How would the total amount change if the investment period were extended to 30 years?
4. What effect would a change to quarterly compounding have on the final amount?
5. What is the impact of inflation on the future value of investments over long periods?

Tip: Small increases in the interest rate or deposit amount can significantly boost the future value of your savings over long periods due to compounding.