Question

Ms. Parker would like to have $99.000 buy a new car in 8 yearsTo accumulate $99,000 in years, how much should she invest monthly in a sinking tund with 3% Interest compounded monthly?

Answer 1

$1,161.23

Step-by-step explanation:

For computing the monthly payment we need to apply the PMT formula i.e to be shown in the attachment below:

Given that,

Present value = $99,000

Future value or Face value = $0

RATE = 3% ÷ 12 months = 0.25

NPER = 8 years × 12 months = 96 months

The formula is shown below:

= PMT(RATE;NPER;-PV;FV;type)

The present value come in negative

So, after applying the above formula, the monthly payment is $1,161.23