document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1196118>Question 1196118</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Please help me with the homework:<BR>\n" );
document.write( "A university student plans to buy a second hand car costing R150000.00 in five years time. The student decides to invest money into an investment fund earns 10% p.a.compounded monthly. How much is the amount of money that he will need to pay into this investment fund every months? </SPAN>\n" );
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document.write( "FV = future value = R150,000.00 <BR>\n" );
document.write( "r = annual rate = 0.10 = 10%<BR>\n" );
document.write( "i = interest rate per month = r/12 = 0.10/12 = 0.00833333333333333 approximately<BR>\n" );
document.write( "n = number of months = 5*12 = 60\r<BR>\n" );
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document.write( "Plug these values into the future value annuity formula<BR>\n" );
document.write( "Solve for P<BR>\n" );
document.write( "FV = P*( (1+i)^n - 1 )/i<BR>\n" );
document.write( "150000 = P*( (1+0.00833333333333333)^60 - 1 )/0.00833333333333333<BR>\n" );
document.write( "150000 = P*77.4370721734303<BR>\n" );
document.write( "77.4370721734303P = 150000<BR>\n" );
document.write( "P = 150000/77.4370721734303<BR>\n" );
document.write( "P = 1937.05670669025<BR>\n" );
document.write( "P = 1937.06\r<BR>\n" );
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document.write( "Answer:   <font color=red>R1937.06</font> needs to be deposited every month.<BR>\n" );
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