Question 1208775
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Use the savings plan formula to answer the following question.
Your goal is to create a college fund for your child. 
Suppose you find a fund that offers an APR of 7%. 
How much should you deposit monthly to accumulate ​$89,000 in 13 ​years?
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I will consider/assume this saving plan as a classic Ordinary Annuity saving plan
(money are deposited at the end of each month). The general formula for such a plan is 


    FV = {{{P*(((1+r)^n-1)/r)}}},    


where  FV is the future value of the account;  P is the monthly payment (deposit); 
r is the monthly effective percentage presented as a decimal; 
n is the number of deposits (= the number of years multiplied by 12, in this case).


From this formula, you get for the monthly payment 


    P = {{{FV*(r/((1+r)^n-1))}}}.     (1)


Under the given conditions, FV = $89,000;  r = 0.07/12;  n = 13*12.  
So, according to the formula (1), you get for the monthly payment value


    P = {{{89000*(((0.07/12))/((1+0.07/12)^(13*12)-1))}}} = 351.3193,


which we round to rounded to closest greater cent  $351.32.


<U>Answer</U>.  The necessary monthly deposit value is $351.32.
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Solved.