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Find the required monthly payment to accumulate $32,000 in 10 years at an APR of 7.9% compounded monthly for an annuity.

Find the required monthly payment to accumulate $32,000 in 10 years at an APR of 7.9% compounded-example-1

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Explanation:

To calculate the required monthly payment to accumulate $32,000 in 10 years at an APR of 7.9% compounded monthly for an annuity, we can use the formula for the present value of an annuity due:

PV = PMT × ((1 - (1 + r/n)^(-n×t)) / (r/n)) × (1 + r/n)

where:

- PV is the present value of the annuity due ($32,000)

- PMT is the monthly payment we want to find

- r is the annual interest rate (7.9%)

- n is the number of times interest is compounded per year (12 for monthly compounding)

- t is the number of years (10)

PMT = PV / ((1 - (1 + r/n)^(-n×t)) / (r/n)) × (1 + r/n) = **$292.07**

Therefore, the required monthly payment to accumulate $32,000 in 10 years at an APR of 7.9% compounded monthly for an annuity is **$292.07**.

User Randy Orrison
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