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Suppose You have a savings account earning 4.8% APR and you want to have 1000 at...

Suppose You have a savings account earning 4.8% APR and you want to have 1000 at the end of 4 years. How much should you deposit each month to obtain this goal

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Expert Solution

Deposit in each month (P) FVA÷([(1+r)^n-1]÷r)
Here,
A Interest rate per annum 4.80%
B Number of years                                                              4
C Number of payments per per annum                                                            12
A÷C Interest rate per period ( r) 0.40%
B×C Number of periods (n) 48
Future value of annuity (FVA)                                                      1,000
Deposit in each month (P) $            18.94
1000÷(((1+0.4%)^48-1)÷0.4%)

jeff jeffy answered 1 year ago
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