Question

You want to send your alumni association $17 per month for a swimming scholarship. If your deposit earns 3.0% annual interest, compounded monthly, how much should be deposited one time?

Answer 1

The amount to be deposited one time is $6,800.

Step-by-step explanation:

This can be calculated using the following formula:

M = D * r ..................... (1)

M = Monthly amount to be sending to the alumni association = $17

D = Amount to be deposited one time = ?

r = Monthly interest rate = Annual interest rate / 12 = 3.0% / 12 = 0.03 / 12 = 0.0025

Substituting the values into equation (1) and solve for D, we have:

$17 = D * 0.0025

D = $17 / 0.0025

D = $6,800

Therefore, the amount to be deposited one time is $6,800.