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