Question 15 (1 point) $97.008 at that You plan to buy the house of your dreams i

Question

Question 15 (1 point) $97.008 at that You plan to buy the house of your dreams in 14 years. You have estimated that the price of the house will be ti me. You are able to make equal deposits every month at the end of the month into a savings account at an annual rate of 4 percent, compounded monthly. How much money should you place in this savings account every month in order to accumulate the required amount to buy the house of your dreams? Round the answer to two decimal places Your Answer: Answer Save Page 15 of 15 Next Page Save All Responses Go to Submit Quiz

Explanation / Answer

The FV of Annuity is given by:

FV = P { ( 1 + r ) n - 1 } / r , where r = 7.64 / 12

97008 = P { ( 1 + 0.0064 ) 168 - 1 } / 0.0064

97008 = P * 300.09

Thus P = 323.26 which is the monthly payment to be made.

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