# algebra

posted by .

3. Suppose a student wants to be a millionaire in 40 years. If she has an account that pays 8% interest compounded monthly, how much must she deposit each month in order to achieve her goal of having \$1,000,000? What is the present value of this annuity?

• algebra -

P(1+.08/12)^40 = 1000000
P*21.72 = 1000000
P = \$46040.52

• algebra -

Oops. Monthly deposits.

Let r = 1 + .08/12 = 1.00666666

M (r^480 - 1)/(r-1) = 1000000
3641.007M = 1000000
M = \$274.65

Anyone see an error here?

• algebra -

I let my calculator carry its maximum digits and got
\$286.45

Also the present value of \$1000000 40 years from now at 8% compounded monthly
PV (1.00666666..)^480 = 1000000
PV = \$41197.40

## Similar Questions

1. ### Finite Mathematics

Jessica wants to accumulate \$14,000 by the end of 5 yr in a special bank account, which she had opened for this purpose. To achieve this goal, Jessica plans to deposit a fixed sum of money into the account at the end of the month over …
2. ### algebra

1. Suppose Mary deposits \$200 at the end of each month for 30 years into an account that pays 5% interest compounded monthly. a. How much total money will she have in the account at the end?
3. ### Algebra

Suppose a student wants to be a millionaire in 40 years. If she has an account that pays 8% interest compounded monthly, how much must she deposit each month in order to achieve her goal of having \$1,000,000?
4. ### algebra

Suppose a student wants to be a millionaire in 40 years. If she has an account that pays 8% interest compounded monthly, how much must she deposit each month in order to achieve her goal of having \$1,000,000?
5. ### math

Suppose a student wants to be a millionaire in 40 years. If she has an account that pays 8% interest compounded monthly, how much must she deposit each month in order to achieve her goal of having \$1,000,000?
6. ### math

Suppose a student wants to be a millionaire in 40 years. If she has an account that pays 8% interest compounded monthly, how much must she deposit each month in order to achieve her goal of having \$1,000,000?
7. ### Mathematics and investment

1. Angelo wants to renovate his house in 3 years. He estimates the cost 300,000. How much must Angelo invest now at 8% compounded quarterly in order to have 300,000 3 years from now. 2. Angelo Ancis want to save 500,000 in 5.5 years …
8. ### College Statistics

How much should you invest each month in order to have \$800,000 if your rate of return is 5.3% compounded monthly and you want to achieve your goal in 40 years?
9. ### Savings

A. How much should you invest each month in order to have \$800,000 if your rate of return is 5.3% compounded monthly and you want to achieve your goal in 40 years?
10. ### SUMMARY OF FINANCIAL TIME VALUE OF MONEY

How much should you invest each month in order to have \$800,000 if your rate of return is 5.3% compounded monthly and you want to achieve your goal in 40 years?

More Similar Questions