How much would you need to deposit in an account each month in order to have $40,000 in the account in 8 years? Assume the account earns 8% annual interest compounded monthly.

Answer 1

The Present vlaue of 40,000 8 years is 96 months. 8%/12 is the monthly compounding Rate. so 40,000

discounted back 96 periods at 8%/12 is .5258413*40k = 21,136.54.

Use the Annuty formula you used in all of your Other Question. PV=21,136.54=PMT*B(8%/12,96)

or B= (1/i)(1-(1/(1+i))^T)

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