SOLUTION: Mr. Nakamura wants to make monthly deposits into an annuity for his grandchild so that $10,000 will be available in 7 years. If the interest rate is 7% compounded monthly, find the

Question 1131685: Mr. Nakamura wants to make monthly deposits into an annuity for his grandchild so that $10,000 will be available in 7 years. If the interest rate is 7% compounded monthly, find the monthly deposit. (Round your final answer to two decimal places.)
Found 2 solutions by Boreal, greenestamps:
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
FV(r/n)=payment*(1+(r/n)^84-1, the 84 number of compoundings
round at end
10000(.07/12)=p*(1+(.07/12))^84-1
p=$92.59
Answer by greenestamps(13203) (Show Source): You can put this solution on YOUR website!

Use the standard formula for an annuity, with contributions of x monthly for 7 years (84 total contributions), with an annual interest rate of 7% compounded monthly, with a future value of $10,000...

Evaluate the expression in parentheses, then divided 10000 by the result to find the monthly contribution x.

I recommend evaluating the expression one small step at a time; if you try to enter it in your calculator all at once, it is far too easy to get parentheses in the wrong places, giving ridiculous answers.

(answer: $92.59)
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