Answer:
$2,221.6 monthly
Step-by-step explanation:
A = P(1 + r)^n
A is the total amount I intend to save = $15,000
r is the yearly interest rate = 3.6% = 0.036
n is the duration to achieve my goal = 4 and 1/2 years = 54 months
15,000 = P(1 + 0.036)^54
15,000 = P(1.036)^54
P = 15,000/6.752 = 2,221.6
I need to put $2,221.6 into the savings account monthly
Answer:
MP = $256.30
Therefore, you need to put $256.30 per month into the savings account at the end of each month.
Step-by-step explanation:
The future value of an investment paid at the end of each month with interest compounded monthly can be written as;
A = MP × {[(1 + r/n)ⁿᵗ - 1] / (r/n)}
MP = A ÷ {[(1 + r/n)ⁿᵗ - 1] / (r/n)} .......1
Where;
A = future value of investment = $15,000
MP = monthly payment at the end of the month
r = interest rate = 3.6% = 0.036
t = time = 4.5 years
n = number of times the interest is compounded = 12
Substituting the values into equation 1
MP = 15000 ÷ {[(1 + 0.036/12)^(12×4.5) - 1] / (0.036/12)}
MP = 15000 ÷ 58.52503734772
MP = $256.30
Therefore, you need to put $256.30 per month into the savings account at the end of each month.
