Concept explainers
Saving How much money should be invested monthly at 6% per year, compounded monthly, to have $2000 in 8 months?
To find: The money to be invested monthly.
Answer to Problem 10E
The Money to be invested monthly is $245.66.
Explanation of Solution
Given:
Future Value = $2,000
Interest Rate = 6% per year (or 0.50% per month)
Number of Payments = 8 months/payments
Formula:
Here,
Aj = Future Value of Annuity
R = Periodic Payment
i = Interest Rate
n = Number of Years/Payments
Saving: A savings may be defined the amount which is saved after spending is called savings. In banking, savings are referred to as deposits, short-term or long-term savings.
Calculation:
The money to be invested monthly is calculated by multiplying the future value of annuity with interest rate and the result is divided by 1 plus interest rate to the power of number of payment and the whole result is subtracted by 1.
Therefore, the money to be invested monthly is $245.66.
Chapter 12 Solutions
Precalculus: Mathematics for Calculus - 6th Edition
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