53.2k views
0 votes
You are considering an investment in a Third World bank account that pays a nominal annual rate of 18%, compounded monthly. If you invest $5,000 at the beginning of each month, how many months would it take for your account to grow to $335,000?

User Marcoseu
by
4.7k points

1 Answer

4 votes

Answer:

It will take 46 months for the account to grow to $335,000.

Step-by-step explanation:

Future investment value = $335,000

Monthly investment = $5,000

Annual rate of interest = 18%

You will need to invest 46.000 periods to reach the future value of $335,000.00.

FV (Future Value) $332,759.70

PV (Present Value) $167,761.69

N (Number of Periods) 46.000

I/Y (Interest Rate) 1.500%

PMT (Periodic Payment) $5,000.00

Starting Investment $0.00

Total Principal $230,000.00

Total Interest $102,759.70

User BjarkeCK
by
4.6k points