You want to have $25000 saved 5 years from today in order to make a down...

You want to have $25000 saved 5 years from today in order to make a down payment on a house. To fund this, you will make deposits each week from your paycheck into an account that will earn 4.88 percent compounded weekly. How much must you deposit each week?

a. $90.61

b. $84.94

c. $87.22

d. $93.44

e. 96.15

Expert Solution

Payment required	=	FV*r /[(1+r)^n -1]

Future value	FV	25,000.00
Rate per period	r
Annual interest		4.88%
Number of interest payments per year		52
Interest rate per period		0.0488/52=
Interest rate per period		0.09385%


Number of periods	n
Number of years		5
Periods per year		52

number of periods		260


Period payment	=	25000*0.000938/ [(1+0.000938)^260 -1]
	=	84.94

Answer is $84.94

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jeff jeffy answered 2 years ago

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