Question

Regis deposits $5000 into an account for his 10-year-old child the bank has an annual interest rate of 8.5%, compounded monthly. 

a. What regular monthly deposit amount is needed to make the account worth $1 million by the time the child is 55 years old.

Answer 1

$123.99 should be deposited every month to arrive at bank balance of $1,000,000.59 after 539 months of depositing with the initial deposit of $5,000 already earning interest up to 540 months or 12 times each year for 45 years.