document.write( "Question 1123825: Your baby is born, and you want to make monthly payments into a college fund over the next 18 years. Your goal is to have $100,000 in the fund in 18 years. Assuming an APR of 5%, calculate how much you should deposit monthly?\r
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Algebra.Com's Answer #740198 by ikleyn(52778)\"\" \"About 
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document.write( "It is a classic Ordinary Annuity saving plan. The general formula is \r\n" );
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document.write( "    FV = \"P%2A%28%28%281%2Br%29%5En-1%29%2Fr%29\",    \r\n" );
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document.write( "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; \r\n" );
document.write( "n is the number of deposits (= the number of years multiplied by 12, in this case).\r\n" );
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document.write( "From this formula, you get for for the monthly payment \r\n" );
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document.write( "    P = \"FV%2A%28r%2F%28%281%2Br%29%5En-1%29%29\".     (1)\r\n" );
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document.write( "Under the given conditions, FV = $100,000;  r = 0.05/12;  n = 18*12.  So, according to the formula (1), you get for the monthly payment \r\n" );
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document.write( "    P = \"100000%2A%28%28%280.05%2F12%29%29%2F%28%281%2B0.05%2F12%29%5E%2818%2A12%29-1%29%29%29\" = $286.37.\r\n" );
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document.write( "Answer.  The necessary monthly deposit value is $286.37.\r\n" );
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document.write( "Note that of projected $100,000 the total of yours monthly payment deposits will be only  18*12 times $286.37, i.e. 18*12*286.37 = 61855.92 dollars.\r\n" );
document.write( "The rest is what the account will earn/accumulate in 18 years.\r\n" );
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\n" ); document.write( "\n" ); document.write( "On Ordinary Annuity saving plans,  see the lessons\r
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