Question

You find a mutual fund that offers approximately 6% APR compounded monthly. How much will you need to invest each month for the next year in order to have $1000

Answer 1

Answer:941.78

Explanation:

Answer 2

The amount you need to invest is $943.4/12 = $ 78.61 each month for the next year in order to have $1000

Explanation:

`A= P(1+r/n)^(nt)`

A= future value

P= Principal value

r= interest rate in decimal

n= no of time interest is compounded

t= time in years.

Using this formula we can find the money needed to invest i.e P

where r = 6% or 0.06

n= 12 , t= 1 and A=1000

`A= P(1+r/n)^(nt)`

`1000= P(1+0.06/12)^(12*1)`

`1000= P(1.06)`

`/frac{1000}{1.06}= P`

`P=$943.4`

The amount you need to invest in a year= $943.4

The amount you need to invest in a month= $943.4/12

= $ 78.61