You invest $25/month at a rate of 3.25% APR compounded monthly for 30 years.

What is the total amount that you contributed out of your pocket?

1 answer

To find the total amount that you contributed out of your pocket, you can calculate the monthly contribution and then multiply it by the number of months over the total investment period.

You are investing $25 per month for 30 years.

  1. First, calculate the total number of months in 30 years: \[ 30 \text{ years} \times 12 \text{ months/year} = 360 \text{ months} \]

  2. Next, calculate the total contribution: \[ 25 \text{ dollars/month} \times 360 \text{ months} = 9000 \text{ dollars} \]

Therefore, the total amount that you contributed out of your pocket is $9,000.