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 2 years ago
a person wishes to invest M dollars at t eh end of each month from January 2000 until the end of December 2003. If the account gives interest at the annual rate of 18% compounded monthly and the individual wishes to have $100,000 by the end of 2003, how much should be invested each month?
 2 years ago
a person wishes to invest M dollars at t eh end of each month from January 2000 until the end of December 2003. If the account gives interest at the annual rate of 18% compounded monthly and the individual wishes to have $100,000 by the end of 2003, how much should be invested each month?

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sheg
 2 years ago
Best ResponseYou've already chosen the best response.0it is \[A=P\times{(1+r)^{n}}\] where A = Amount P = Principal r = Rate of interest n = number of time period

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0ok now tell me for how many moths you will be investing??

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0so for 3 years that's 36 months

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0you started investing from Jan 200  Dec 2003 right it is 36 months

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0A=100,000x(1+18%)^36

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0so here n = 3yrs = 36 months r = 18% per annum but this will get compounded monthly so it cannot be 18%

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0can i leave it in the annual form and just do A=100,000x(19)^3 ?

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0so your formula will change right the formula that i had given u is the general formula now when it is compounded monthly in that case the formula would be \[A = P\times{(1+{{r}\over{12}})^{12n}}\]

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0@chrissytt17 here principal is unknown

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0i thought the principal is the amount that the individual wants

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0no what you want that you will get at what time????

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0the individual wishes to have $100,000 by the end of 2003, how much should be invested each month?

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0100,000=Px(1+r/12)^12n

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0where r = 18% but when you are plugging in the value of r that time convert it into decimal so r = 0.18

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0100,000= P x (1+.18/12)^12*3 ?

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0100,000= P x (1.015)^36

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0am i on the right track?

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0wait let me cross check it

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0i came up with about 58,513.75

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0I followed the formula

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0hey i was not telling you about the Annuity do you know about it?

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0ok do you know about time value of money

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0\[100000 = P \times \sum_{n=1}^{36}(1.015)^n\]\]

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0ok solve this one you will get the exact value

sheg
 2 years ago
Best ResponseYou've already chosen the best response.0the second factor on RHS is called as Present Value Interest Factor of Annuity

chrissytt17
 2 years ago
Best ResponseYou've already chosen the best response.0I don't know what that symbol is
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