document.write( "Question 1167591: A man will deposit with a trust company a sum just sufficient to provide his family with an annuity of 750 dollars per month for 15 years. How much does he deposit if the fund accumulates at {4 1/2%, m=12}? \n" ); document.write( "

Algebra.Com's Answer #851339 by ikleyn(52781) $\"\"$ $\"About$

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\n" ); document.write( "A man will deposit with a trust company a sum just sufficient to provide his family with an annuity
\n" ); document.write( "of 750 dollars per month for 15 years. How much does he deposit if the fund accumulates at {4.5%, m=12}?
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document.write( "In this problem, they talk about the sinking fund, which is a monthly compounded account.  It provides \r\n" );
document.write( "monthly outpayments of $750 every month during 15 years. The account is compounded monthly at the annual \r\n" );
document.write( "rate of 4.5%.\r\n" );
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document.write( "They want you find the starting (= the original) amount of money in the fund.\r\n" );
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document.write( "The total outpayment from the fund in 15 years is\r\n" );
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document.write( "    Total = 750*12*15 = 135000  dollars.\r\n" );
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document.write( "To answer the problem's question, we should calculate the Present Value of this amount.\r\n" );
document.write( "The Present Value is\r\n" );
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document.write( "    PV =  = 68822.95.\r\n" );
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document.write( "Thus the problem is just solved.\r\n" );
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document.write( "The initial amount in the fund must be (at least) $68,822.95.    ANSWER\r\n" );
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document.write( "Then the fund will be able to pay out $750 every month during 15 years.\r\n" );
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