Answer:
The monthly deposit required is $2,411.
Explanation:
We can use a financial calculator to solve the following.
The period is for 88 years thus we will make N = 88.
The interest rate is 5,5% thus we will make I/Y = 5,5$
The future value needs to be $58000. Thus FV = 58000
The present value is currently 0.
We need to calculate the monthly payments. Thus we will solve for payments (PMT).
The annual investment will be 28,939 / 12 = $2,411 per month over 88 years.
Alternatively we can use the annuity formula which is PMT = FV x i / [tex](1+i)^{88}[/tex] - 1
Using this formula we also end up with an answer of 28,939. We then divide this by 12 to get the monthly amount of $2,411.
Answer:
The answer is $483.33
Explanation:
To solve this problem, we will use the following formula:
A = d((1+r/n)^nt-1)/(r/n)
Where:
r = rate (0.055)
n = number of compoundings per year (12)
nt = total number of compoundings (96)
A= d ((1+.055/12)^96-1)/(.055/12)
58,000=d(1.55)-1)/(.055/12)
58,000 = 120d
d=$483.33
