If a person starts investing $100 per month starting at age 21, and that money earns a 5% return every year, how much will this person have when turning 70 years old? for ease of calculation, assume starting balance of $0 and annual contributions of $1,200 (12*$100).

The correct answer is:

$263,123.19.

Explanation:

The formula for compound interest with contributions is:
,

where P is the starting principal, r is the interest rate, c is the yearly contribution, and n is the number of years.

For this problem, he starts out depositing $1200; this is P.

He contributes $1200 per year; this is c.

The interest rate is 5%; 5%=5/100=0.05.  This is r.

He starts at age 21 and we want to know how much he will have at 70:
70-21=49.  This is n.

This gives us:

The answer is 76° i believe