Question

suppose you have a bank account earning 6% annual interest rate compounded monthly, and you want to put in enough money so that you can withdraw $100 at the end of each month over a time frame of ten years. calculate how much money you need to start with. show work.

Answer 1

9007.35

Explanation:

First find the effective rate: .06/12= .005

let x= amount

`x=100(1-(1+.005)^(-12*10))/(.005)\\100*(1-.549632733)/(.005)\\9007.345333`