Interest bearing savings account?

Question

Okay, I am working on a project; I cannot legally list the movies title. However the director has tasked me out to figure out this character's finances so that he can realistic represent her savings.

Please help me if you can.

In 1984 she set up an interest bearing savings account. We found an add by Bank of America that would give someone 4% on the accounts, tax deferred. She has had the account for 22 yrs when she finally withdrew the money.

Here are her deposits.

$2,122 each month for the first 5 yrs

$2,682 each month for the next 6 yrs

$3,549 each month for the last 11 yrs

How much money should she have; considering no withdrawals and compound interest. The account is tax deferred. 4% interest rate.

Thanks for your help.

Answer 1

Answered in the original question.

Answer 2

you can process this problem using a spreadsheet.  Interest is compounded (added monthly).  Making a deposit on the first day and receiving an interest payment of .04/12 times the deposit on the first day of the next month.  Add to that the new deposit and then multiply the new total of 2 deposits and 1 interest payment by .04/12  continue in this fashion for 60 months until the deposit changes.

You can tell the professor hmm.. I mean director that you think the answer would be $1,206,643.59   Not enough to make movie fans fall over in their popcorn.  

Answer 3

lol..so you're not very good at math or telling the truth huh?