You want to purchase a new car in 3 years and expect the car to cost $30,000

Question

You want to purchase a new car in 3 years and expect the car to cost $30,000. Your bank offers a savings plan with a guaranteed APR of 5.5% if you make regular monthly deposits. How much should you deposit each month to end up with $30,000 in 3 years

Answer 1

A = [pmt (1 + r/n)^nt - 1] / (r / n)

A = 30000

pmt = monthly deposit

r = yearly rate

n = number of compounds per year

t = number of years

Can you substitute values and answer?