Use the savings plan formula to answer the following question.
You want to purchase a new car in 8 years and expect the car to cost $83,000. Your bank offers a plan with a guaranteed APR of 6.5% if you make regular monthly deposits. How much should you deposit each month to end up with $83,000 in 8 years?
I see you changed your name, but the type of question you ask is the same
style that has already been answered when you were Gabriel.
Are you even looking at the replies ???
Don’t be rude
To find out how much you should deposit each month to end up with $83,000 in 8 years using the savings plan formula, you need to follow these steps:
Step 1: Understand the formula
The savings plan formula is given by:
A = P(1+r/n)^(nt)
where:
A = the future amount you want to have (in this case, $83,000)
P = the regular monthly deposit
r = the annual interest rate (in this case, 6.5% or 0.065)
n = the number of times interest is compounded per year (since it's not mentioned, let's assume it's compounded monthly)
t = the number of years (in this case, 8 years)
Step 2: Plug in the values into the formula
A = $83,000
r = 0.065
n = 12 (since it's compounded monthly)
t = 8
Step 3: Solve for P
We need to solve for P in the formula, so let's rearrange the formula to isolate P:
P = A / (1+r/n)^(nt)
Step 4: Substitute the values and calculate
P = 83000 / (1+0.065/12)^(12*8)
Now, using a calculator or a spreadsheet, solve the equation.
The computed value for P will give you the amount you should deposit each month to end up with $83,000 in 8 years.