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September 20, 2014

September 20, 2014

Posted by **Blanca** on Thursday, December 8, 2011 at 6:57pm.

- algebra -
**tchrwill**, Friday, December 9, 2011 at 10:25amWhat is the monthly deposit required to accumulate to a fund of $1,000,000 over a period of 40 years with deposits starting at the end of the first month and bearing an interest rate of 8% compounded monthly?

S(n) = $1,000,000]

i = .08/12 = .00666...

n = 40(12) = 48

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

1,000,000(.00666...)/[1.00666...)^48-1]

$17,746.25

As for the present value,

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

P=17,746.25[1-(1.00666...)^-40]/.00666...

P = $726,920.

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