[Math] Question on compound interest

sequences-and-series

If you deposit $100 at the end of every month into an
account that pays 3% interest per year compounded monthly,the amount of interest accumulated after months is given by the sequence.

I tried the following method to solve it

I used geometric seq sum of nth term but in actual formula a minus n(number of months). is present.Can anyone please derive the equation for Interest after n months.

Thanks

Best Answer

The total value of all the payments and the accumulated interest, at $i=0.0025,$ is given by$$100+100(1+i)+100(1+i)^2+100(1+i)^3+...+100(1+i)^{n-1}$$The last payment accumulates zero interest, and the first payment compounds for $n-1$ months. The sum of this geometric series, $S$, is given by:$$S=\frac{100((1+i)^n-1).}{i}$$ You then need to subtract $100n$ from this total to find the interest portion.