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in order for an andre to reach his saving goal how much will andrew need to save each month

In Order For An Andre To Reach His Saving Goal How Much Will Andrew Need To Save Each Month class=

Sagot :

SOLUTION

Write out formula

Where

PMT= Monthly payment

P= Principal

APR= Annual payment rate

n = number of times compounded in a year

[tex]\begin{gathered} P=36,950 \\ \text{APR}=2.5\text{ \%=0.025} \\ n=12 \\ y=5 \end{gathered}[/tex]

Substitute the values into the formula

[tex]\text{PMT}=\frac{36950\times\frac{0.025}{12}}{(1-(1+\frac{0.025}{12})^{-5(12)}}[/tex]

Simplifying the expression above

[tex]\begin{gathered} \text{PMT}=\frac{76.979}{1-(1.0021)^{-60}} \\ \\ \text{PMT}=\frac{76.979}{1-0.8826}=\frac{76.979}{0.1174}=655.70 \end{gathered}[/tex]

Hence

[tex]\text{PMT}=655.70[/tex]

Therefore,

Andre will need to save 655.70monthly to reach his goal

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