Posted by **Aly** on Thursday, January 20, 2011 at 5:20pm.

Mary would like to save $10 000 at the end of 5 years for a future down payment on a car. How much should she deposit at the end of each week in a savings account that pays 12%/a, compounded monthly, to meet her goal?

d. Determine the weekly deposit without technology.

Can someone provide me with the formula please?

- math formula? -
**Damon**, Thursday, January 20, 2011 at 5:53pm
That is called a sinking fund

Since it is compounded monthly do it all monthly and divide the deposit by 4 to get the weekly figure.

S =D [ (1+r)^n -1 ] /r

S is what we need at the end, in this case 10,000

D is the monthly deposit (remember divide it by four for weekly)

n is the number of compounding periods, in this case 5*12 = 60

r is the interest rate (decimal) at each compounding period, in this case .12/12 = .01

so

10,000 = D[ 1.01)^60 -1 ] / .01

10,000 = D (0.817)/.01 = D (81.7)

D = 122.44

D/4 = $30.61 per week

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