Question

g Use the appropriate formula to determine the periodic deposit. How much of the financial goal comes from deposits and how much comes from​ interest? Periodic Deposit Rate Time Financial Goal ​$? at the end of each month ​% compounded monthly years ​$

Answer 1

Question Completion:

Periodic Deposit = ?

Rate = 7% compounded monthly

Time = 19 years

Financial Goal ​$120,000

Answer:

a) The periodic deposit = $253.03

b) Amount of financial goal from deposits = $57,691.30

c) Amount of financial goal from interest = $62,308.71

Step-by-step explanation:

You will need to contribute $253.03 at the end of each month to reach the future value of $120,000.00.

FV (Future Value) $120,000.00

PV (Present Value) $31,860.39

N (Number of Periods) 228.000 (19 * 12 months)

I/Y (Interest Rate) 0.583% (7%/12)

PMT (Periodic Payment) $253.03

Starting Investment $0.00

Total Principal $57,691.30

Total Interest $62,308.71