Saving up or paying off debt usually involves regular payments.
The compound interest formula is only good for a single payment.
The ‘sum of a geometric progression’ formula can help, but if you don’t know it then we can use a finance calculator, such as fncalculator.com
Examples
From question 2, we see that the future value of this investment is 51117.98
The total amount invested is the initial 2000 plus payments of 200 made four times a year for 25 years. That is:
![\[2000+200\times 4\times 25 = 22000\]](https://tentotwelvemath.com/wp-content/ql-cache/quicklatex.com-8ab3e301bd6cb0e4dded28566190d3e5_l3.png "Rendered by QuickLaTeX.com")
The interest earned is 51117.98 – 22000 = 29117.98
Final answer? ’40’ stands for ‘quarter years’. Therefore the number of years is 
.
Now we need to calculate how much is paid to the credit card company in total:
![\[138.66 \times 36 = 4991.76\]](https://tentotwelvemath.com/wp-content/ql-cache/quicklatex.com-d2c23015b09a4172db304e41da07f6bb_l3.png "Rendered by QuickLaTeX.com")
The interest paid is:
![\[4991.76-4000=991.76\]](https://tentotwelvemath.com/wp-content/ql-cache/quicklatex.com-765dd734ba48104e50dfd13e1bb3f415_l3.png "Rendered by QuickLaTeX.com")
Click on the ‘advanced’ version of the calculator and try these practice questions:
TVM Calculator quiz (you may practice this any time. You will be set this task on quiz day).