Connect with a global community of knowledgeable individuals on IDNLearn.com. Our experts provide timely and precise responses to help you understand and solve any issue you face.
Sagot :
Using the future value formula, it is found that you would need to deposit $272.95 in the account each month.
What is the future value formula?
It is given by:
[tex]V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right][/tex]
In which:
- P is the payment.
- n is the number of payments.
- r is the interest rate.
For this problem, considering that there are monthly compoundings, the parameters are:
r = 0.08/12 = 0.0067, V(n) = 300000, n = 25 x 12 = 300.
Hence we solve for P to find the monthly payment.
[tex]V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right][/tex]
[tex]300000 = P\left[\frac{(1.0067)^{299}}{0.0067}\right][/tex]
1099.12P = 300000
P = 300000/1099.12
P = $272.95.
You would need to deposit $272.95 in the account each month.
More can be learned about the future value formula at https://brainly.com/question/24703884
#SPJ1
Thank you for contributing to our discussion. Don't forget to check back for new answers. Keep asking, answering, and sharing useful information. Your questions are important to us at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.
