Use TVM Solver on your calculator to answer the following questions. Round each answer to the nearest cent.

You deposit $500 each month into an account earning 8% interest compounded monthly.

a) How much will you have in the account in 25 years?

$

b) How much total money will you put into the account?

$

c) How much total interest will you earn?

$

To solve this problem using the TVM (Time Value of Money) Solver, let's identify and use the relevant variables in the formula:

### Given:
- **PMT (Payment per period):** $500 (monthly deposit)
- **I% (Annual interest rate):** 8%
- **N (Number of periods):** 25 years × 12 months/year = 300 months
- **PV (Present Value):** 0 (since there is no initial deposit other than monthly contributions)
- **P/Y (Payments per year):** 12
- **C/Y (Compounding periods per year):** 12

### To find:
- **FV (Future Value):** Total amount in the account after 25 years
- **Total amount deposited:** Sum of all deposits over 25 years
- **Total interest earned:** Difference between the future value and total deposits

Let's compute each part:

### a) Future Value (FV)
Using the TVM solver, input the values:
- N = 300
- I% = 8
- PV = 0
- PMT = -500 (negative because it's an outflow)
- FV = ?
- P/Y = 12
- C/Y = 12

Using these inputs, the calculator will give the Future Value.

### b) Total Deposits
The total amount deposited is simply:
\[
\text{Total Deposits} = \text{PMT} \times N = 500 \times 300
\]

### c) Total Interest Earned
\[
\text{Total Interest} = \text{Future Value} - \text{Total Deposits}
\]

Let's calculate these values.### Answers:
a) **Future Value (FV):** $475,513.20  
b) **Total Money Deposited:** $150,000.00  
c) **Total Interest Earned:** $325,513.20  

These calculations show the power of compound interest over time, significantly increasing the amount compared to your total deposits.

Would you like any further details or explanations on these results?

### Related Questions:
1. How does changing the interest rate affect the future value?
2. What happens if you increase the deposit amount each month?
3. How does compounding frequency (e.g., quarterly vs. monthly) affect the total interest?
4. What would the future value be if you deposited a lump sum instead of monthly contributions?
5. How would the future value change if the investment period was shortened to 20 years?

**Tip:** Regular, consistent deposits and compound interest are key to growing savings significantly over time!

You deposit $500 each month into an account earning 8% interest compounded monthly. a) How much will you have in the account in 25 years? b) How much total money will you put into the account? c) How much total interest will you earn?

Find out how much you will have after 25 years when depositing $500 monthly at 8% interest compounded monthly. Learn the future value, total deposits, and total interest earned. This problem involves key concepts like compound interest and the Time Value of Money, suitable for finance students.

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