suppose that you would like to save $20,000 over 5 years to use as a down payment for a house by making regular end-of-the-month deposits in an account that earns 4% compounded monthly. How much should you deposit into the account each month?

suppose that you would like to save $20,000 over 5 years to use as a down payment for a house by making regular end-of-the-month deposits in an account that earns 4% compounded monthly. How much should you deposit into the account each month?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 4QTD

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Expert Solution

Step 1

Computation of monthly deposit:

Hence, the monthly deposit into the account is $301.66 per month.

K19
A
1 Particulars
-20,000
2 FV
3 PV
4 NPER
60
0.33%
$301.66
6 PMT

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