Question

At your child's birth, you begin contributing monthly to a college fund. The fund pays an APR of 4.8% compounded monthly. You figure your child will need $40,000 at age 18 to begin college. What monthly deposit is required? (Round your answer to the nearest cent.)

Answer 1

`\bf \qquad \qquad \textit{Future Value of an ordinary annuity} \\\\ A=d\left[ \cfrac{\left( 1+(r)/(n) \right)^(nt)-1}{(r)/(n)} \right] \\\\\\ \qquad \begin{cases} A= \begin{array}{llll} \textit{compounded amount} \end{array}\to & \begin{array}{llll} 40,000 \end{array}\\ d=\textit{periodic deposits}\\ r=rate\to 4.8\%\to (4.8)/(100)\to &0.048\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{is monthly, thus 12} \end{array}\to &12\\ t=years\to &18 \end{cases}`

solve for "d"