The Z Corporation needs $180,000 in 60 months. If they deposit $2,000 per month for the first 20 months, $2,500 for the next 20 months, and $2,000 + R for the last 20 months, what is R if they can invest at 7%(12)?

Question

The Z Corporation needs $180,000 in 60 months. If they deposit $2,000 per month for the first 20 months, $2,500 for the next 20 months, and $2,000 + R for the last 20 months, what is R if they can invest at 7%(12)?

Answer 1

i = .07/12 = .0058333... (I stored that in memory on my calculator for good accuracy)

2000(( 1.0058333..^20 - 1)/.0058333)(1.0058333..)^40 + 2500( (1.00583333..^20 - 1)/.0058333..)(1.0058333..)^20 + X(1.005833..^20 - 1)/.0058333.. = 180000 , X = 2000+R

53375.555 + 59392.5459 + X(21.14810) = 180000
X = $3179.10
So R = 1179.10