Mathematics: Suppose that a family wants to start a college fund for their child. if they can get a rate of 5.5% , compounded monthly, and want the fund to have a value of $35,450 after 20 years, how much should they deposit monthly? assume an ordinary annuity and round to the nearest cent.

Suppose that a family wants to start a college fund

kayelynn003

31.12.2021

They should deposit $81.38 monthly.

Step-by-step explanation:

We know that,

$\text{FV of annuity}=P\left(\dfrac{(1+r)^n-1}{r}\right )$

where,

FV of annuity = $35,450

P = monthly payment,

r = rate of interest = 5.5% annually = $\dfrac{5.5}{12}\%$

n = number period = 20 years = 240 months

Putting all the values,

$\Rightarrow 35450=P\left(\dfrac{(1+\frac{0.055}{12})^{240}-1}{\frac{0.055}{12}}\right )$

$\Rightarrow P\dfrac{35450}{\left(\dfrac{(1+\frac{0.055}{12})^{240}-1}{\frac{0.055}{12}}\right )}$

$\Rightarrow P=\$81.38$

Therefore, they should deposit $81.38 monthly.

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leya509

17.08.2021

Step-by-step explanation:

- 3 + 5 - (-1)

We are subtracting a negative so it becomes a positive.

- 3 + 5 + 1

-3 + 6 = 3

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