The tutor tells the quick way to convert the accumulated balance after regular deposits between “beginning” vs “end of month” payments.

In a previous post I tell how to find the end balance of an account after five years of monthly deposits of $100 at the end of each month. What if the deposits are made at the beginning of each month? Assuming monthly compounding, here’s how to convert: multiply the end balance by (1+i/12), where i is the nominal annual rate.

In the case of the previous post, the end balance is 6505.475 after end-of-month deposits. The nominal interest is 3.25%, compounded monthly. With beginning-of-month deposits, the final balance will instead be 6505.475(1+0.0325/12) = 6523.094.

HTH:)

Jack of Oracle Tutoring by Jack and Diane, Campbell River, BC.