Question

Can someone please help me? Please C: And thanks!

How much would you need to deposit in an account each month in order to have $50,000 in the account in 8 years? Assume the account earns 4% annual interest compounded monthly.

Answer 1

$540.98

Explanation:

future value= $ 50,000

number of deposits (n)= 8*12 = 96

rate (r) = 4% per month

= 4÷12 per annum

= 0.33% p.a

i = 0.33÷100

= 0.0033

We know,

Future value of annuity = P÷i [ (1 + i)^n - 1 ]

$50,000 = P÷ 0.0033 [ ( 1+0.0033)^96 - 1]

$50,000 * 0.0033=P [ (1.0033)^96 - 1 ]

$165 = P*0.305

P = $165÷0.305

P = $ 540.98

Rough::

let x= 1.0033)^96

log x = 96 * log (1.0033)

log x = 0.1156

x = Antilog (0.1156)

= 1.305

1.305 - 1 = 0.305