Question 1206311




{{{FV = M* ((1 + r/m)^(mt) - 1) / (r/m))}}}

Here, 
{{{FV}}} is the future value ={{{600000}}}
{{{M}}} is the monthly deposit=?
{{{r/m }}}is the monthly interest rate ={{{10}}}%/{{{12 }}}= {{{0.01/12}}}
 {{{mt}}} is the number of periods ({{{20 }}}years * {{{12}}} months ={{{ 240 }}}months)


a) How much would you need to deposit in the account each month?

{{{600000 = M* ((1 + 0.10/12)^240 - 1) / (0.10/12))}}}

{{{600000 = M* (6.32807363324973007199593 / 0.008333333333333333)}}}

{{{600000 = M* 759.368835989967639}}}


{{{M=600000/759.368835989967639}}}

{{{M≈790.13}}}


b) How much interest will you earn?

you will deposit total of

{{{240*790.13=189631.2}}}

interest earned

{{{600000-189631.2=410368.8}}}