Question 319565: Please help!
Suppose you want to accumulate $25,000 as down payment on a house and the best you can do is to put aside $200 a month. If you deposit this amount at the beginning of each month in an account that credits 0.75% interest monthly, how long will it take you to attain your goal?
Please show me step by step how to gt the following answer
The answer is given as: [88 months]
But I do not know how to get the answer.
The number of monthly installments required to get a certain FV =
ln(FVi + cp) - ln(cp)
n = -------------------------
ln(c + i) - ln(c)
FV = future value
p = investment per compound period
i = interest rate
c = # of compound periods per year
n = # of compound periods
ln(25000*0.09 +12*200)- ln(12*200) / ln(12+0.09)-ln(12)