Posted by **Doran** on Tuesday, November 15, 2011 at 9:02pm.

You intend to create a college fund for your baby. If you can get an interest rate of 5.3% compounded monthly and want the fund to have a value of $123,875 after 17 years, how much should you deposit each month?

$413.01

$7032.70

$319.14

$375.46

- math 140 -
**Steve**, Wednesday, November 16, 2011 at 12:48am
no. of months in 17 years = 204

monthly interest rate = annual rate/12 = 0.44%

So, now just plug in your handy dandy interest formula:

123875 = P*(1.00416666)^204

and solve for P

- math 140 -
**tchrwill**, Wednesday, November 16, 2011 at 11:16am
This is an ordinary annuity where R dollars is deposited in a bank at the end of each month and earning interest compounded monthly.

S(n) = R[(1+i)^n - 1]/i

where R = the monthly deposit, S(n) = the ultimate accumulation, n = the number of periods the deposits are made and i = the decimal interest paid each period.

Therefore, with

S(n) = $123,875

N = 17(12) = 204 and

i = 5.3/(100)12 = .0044166

R = $375.46

- math 140 -
**Anonymous**, Wednesday, August 29, 2012 at 5:01pm
find the sum: 1+2+3+...+40

- math 140 -
**Anonymous**, Wednesday, August 29, 2012 at 5:03pm
find the sum: 1+2+3+...+450

## Answer this Question

## Related Questions

- math - you intend to create a college fund for your baby. if you get an interest...
- maths - An estate agency purchases a machine for R85000 and realize they will ...
- Finance - Loans problem - A company borrows $170000, which will be paid back to ...
- Finance - Loans problem - Can someone please explain how this problem is laid ...
- Finance - Loans problem please help - A company borrows $170000, which will be ...
- Please Help me with a Finance - Loan problem - A company borrows $170000, which ...
- calculus - The proprietor of Carson Hardware Store has decided to set up a ...
- Math - A deposit of $10,000 is made in a trust fund that pays 4.9% interest, ...
- math - A money market fund pays 14% annual interest compounded daily. What is ...
- Math - Since 2007, a particular fund returned 13.8% compounded monthly. How much...

More Related Questions