anonymous
  • anonymous
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?
Mathematics
  • Stacey Warren - Expert brainly.com
Hey! We 've verified this expert answer for you, click below to unlock the details :)
SOLVED
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
jamiebookeater
  • jamiebookeater
I got my questions answered at brainly.com in under 10 minutes. Go to brainly.com now for free help!
anonymous
  • anonymous
No i don't
anonymous
  • anonymous
it is \[A=P\times{(1+r)^{n}}\] where A = Amount P = Principal r = Rate of interest n = number of time period
anonymous
  • anonymous
ok now tell me for how many moths you will be investing??

Looking for something else?

Not the answer you are looking for? Search for more explanations.

More answers

anonymous
  • anonymous
so for 3 years that's 36 months
anonymous
  • anonymous
you started investing from Jan 200 - Dec 2003 right it is 36 months
anonymous
  • anonymous
A=100,000x(1+18%)^36
anonymous
  • anonymous
a=100,000 (19)^36
anonymous
  • anonymous
so here n = 3yrs = 36 months r = 18% per annum but this will get compounded monthly so it cannot be 18%
anonymous
  • anonymous
can i leave it in the annual form and just do A=100,000x(19)^3 ?
anonymous
  • anonymous
so 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 \[A = P\times{(1+{{r}\over{12}})^{12n}}\]
anonymous
  • anonymous
@chrissytt17 here principal is unknown
anonymous
  • anonymous
are you getting my point?
anonymous
  • anonymous
i thought the principal is the amount that the individual wants
anonymous
  • anonymous
no what you want that you will get at what time????
anonymous
  • anonymous
the individual wishes to have $100,000 by the end of 2003, how much should be invested each month?
anonymous
  • anonymous
100,000=Px(1+r/12)^12n
anonymous
  • anonymous
where r = 18% but when you are plugging in the value of r that time convert it into decimal so r = 0.18
anonymous
  • anonymous
100,000= P x (1+.18/12)^12*3 ?
anonymous
  • anonymous
100,000= P x (1.015)^36
anonymous
  • anonymous
am i on the right track?
anonymous
  • anonymous
wait let me cross check it
anonymous
  • anonymous
i came up with about 58,513.75
anonymous
  • anonymous
no it is not correct
anonymous
  • anonymous
I followed the formula
anonymous
  • anonymous
I think I am lost
anonymous
  • anonymous
hey i was not telling you about the Annuity do you know about it?
anonymous
  • anonymous
no
anonymous
  • anonymous
you are in which class
anonymous
  • anonymous
math 118
anonymous
  • anonymous
ok do you know about time value of money
anonymous
  • anonymous
I'm not sure
anonymous
  • anonymous
\[100000 = P \times \sum_{n=1}^{36}(1.015)^n\]\]
anonymous
  • anonymous
ok solve this one you will get the exact value
anonymous
  • anonymous
the second factor on RHS is called as Present Value Interest Factor of Annuity
anonymous
  • anonymous
I don't know what that symbol is
anonymous
  • anonymous
it is summation

Looking for something else?

Not the answer you are looking for? Search for more explanations.