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As this problem is presented, it makes it clear that you make your first steps in learning saving plans.
There are two classic saving plans that suit to this scheme: Ordinary Annuity saving plans and Annuity Due saving plans.
In this site, there are lessons devoted to these plans
- Ordinary Annuity saving plans and geometric progressions
- Annuity Due saving plans and geometric progressions
- Solved problems on Ordinary Annuity saving plans
If regular deposits are made at the end of each month, then it is a classic Ordinary Annuity saving plan. The general formula is
FV = ,
where FV is the future value of the account; P is the monthly payment (deposit); r is the monthly percentage yield presented as a decimal;
n is the number of deposits (= the number of years multiplied by 12, in this case).
From this formula, you get for the monthly payment
P = . (1)
Under the given conditions, FV = $87,000; r = 0.05/12; n = 15*12. So, according to the formula (1), you get for the monthly payment
P = = $325.49.
Answer. The necessary monthly deposit value is $325.49.
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The referred lessons contain EVERYTHING you need to know about this subject, in clear and compact form.
When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.