math help needed

Question

Apex Fabricating wants to accumulate $575,000 for an expansion expected to begin in four years.


If today Apex makes the first of equal quarterly payments into a fund earning 5.95% compounded monthly, what should the size of these payments be? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Answer 1

In order to solve this question, it is necessary to look at the Future Value formula, and work backwards to the payment.

 

The formula is FV = P [ ((1 + r/t)^nt - 1 ) / r/n ]

 

where FV = future value (in this case, $575,000), P = Payments, r = annual rate, t = time in years, n = number of payments per year 

 

Please rearrange the formula to solve for P, insert your values, and perform the calculation