137k views
0 votes
Suppose you want to save in order to purchase a new boat. Take the APR to be 4.8%. You want to have $13,000 toward the purchase of a boat in three years. How much do you need to deposit each month

User Deadvoid
by
6.7k points

1 Answer

6 votes

Answer:

Monthly deposit= $336.46

Step-by-step explanation:

Giving the following information:

Future Value (FV)= $13,000

Number of periods= 12*3= 36 months

Interest rate= 0.048/12= 0.004

To calculate the monthly deposit, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (13,000*0.004) / [(1.004^36) - 1]

A= $336.46

User FishingIsLife
by
6.6k points