Homework Score: 0 of 1 pt 4.C.23 8 of 14 (7 complete) Hw Score: 39. := Question

Question

Homework Score: 0 of 1 pt 4.C.23 8 of 14 (7 complete) Hw Score: 39. := Question Help Use the savings plan formula to answer the following question. Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 7%. How much should you deposit monthly to accumulate $81,000 in 14 years? You should invest $ each month. (Do not round until the final answer. Then round to two decimal places as needed.) Enter your answer in the answer box and then click Check Answer. Check Answer Dis All parts Clear All showing 13

Explanation / Answer

APR=7%=.07

Number of payment per year is i.e. n= 12.

So for 14 years it is x=14*12=168.

Future accumulated value=$81000.

So monthly deposit= future value* (Apr/n)/[(1+Apr/n)^x-1]

= 81000× (.07/12)/ [(1+.07/12)^168-1]

=$ 285.17

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