Question 1198906: Assume that you want to have $ 1900 saved in a sinking fund in 1 year. The account pays 3.5% compounded monthly. What should be your monthly payments?
Monthly Payment =
Found 2 solutions by mananth, ikleyn:
Answer by mananth(16946)   (Show Source):
You can put this solution on YOUR website! FV = PMT * (((1 + r/n)^(nt) - 1)/(r/n))
where FV is the future value ($1900), PMT is the monthly payment , r interest rate (3.5%), n is 12 monthly compounding, and t is the number of years =1.
Plug in the values
1900 = PMT * (((1 + 0.035/12)^(12*1) - 1)/(0.035/12))
Solving for PMT, we get:
PMT = $157.29
.
Answer by ikleyn(52781)  (Show Source):
You can put this solution on YOUR website! .
The problem is posed incorrectly.
To be correct, the problem must say if the payment is made at the beginning or at the end of each month.
The formula in the post by @mananth is written under the assumption
that monthly payments are made at the end of each month.
But his reported value/answer of $157.29 is  .
The correct value/(answer), obtained with this formula, is $155.81.
I recommend you to ignore his post, for the safety of your mind.
|
|
|
