Question

Please help!! It’s due @ midnight

How much should Marc deposit weekly into an account at 8% compounded weekly in order to have
$4500 available for a round trip plane ticket, hotel, and spending money for a trip to Sweden in 2 years?

Please give step by step!

Answer 1

ooh i just learned this, not 100% sure but the amount he should have to deposit is $3835.12

if the weekly one means depositing money every week then it would be $36.88 I think.

Explanation:

p=?

r=.08

n=52

t=2

4500 = P(1+.08/52)^(52 x 2)

divide both sides by (1+.08/52)^(52 x 2)

and you are left with $3835.12

if i take into account that Marc is depositing the money every week the i would divide it by 104 (that is 52 x 2 because 52 weeks in a year and it says 2 years) you would be left with $36.88.

Hope I was any help.

Answer 2

Answer: Marc should deposit $39.87 weekly.

Explanation:

We would apply the formula for determining future value involving deposits at constant intervals. It is expressed as

S = R[{(1 + r)^n - 1)}/r][1 + r]

Where

S represents the future value of the investment.

R represents the regular payments made(could be weekly, monthly)

r = represents interest rate/number of interval payments.

n represents the total number of payments made.

From the information given,

S = $4500

Assuming there are 52 weeks in a year, then

r = 0.08/52 = 0.0015

n = 52 × 2 = 104

Therefore,

4500 = R[{(1 + 0.0015)^104 - 1)}/0.0015][1 + 0.0015]

4500 = R[{(1.0015)^104 - 1)}/0.0015][1.0015]

4500 = R[{(1.169 - 1)}/0.0015][1.0015]

4500 = R[{(0.169)}/0.0015][1.0015]

4500 = R[112.67][1.0015]

4500 = 112.839R

R = 4500/112.839

R = 39.87