ZuoTi.Pro
Question

Micheal wants to have $47,000 in 12 years on a savings plan that requires monthly contributions....

Micheal wants to have $47,000 in 12 years on a savings plan that requires monthly contributions. If he can earn 12 percent APR with monthly compounding on the savings plan, what is the amount that he will have to invest every month for the next 12 years? Round it to two decimal places and do not include the $ sign, e.g., 1234.56.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Number of periods = 12 * 12 = 144

Rate = 12% / 12 = 1%

Future value = Monthly payment * [(1 + r)n -1] / r

47,000 = Monthly payment * [(1 + 0.01)144 -1] / 0.01

47,000 = Monthly payment * 319.061559

Monthly payment = $147.31

Keys to use in a financial calculator:

2nd I/Y 12

FV 47000

I/Y 12

N 144

CPT PMT

0 0
Add a comment
Know the answer?
Add Answer to:
Micheal wants to have $47,000 in 12 years on a savings plan that requires monthly contributions....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A couple will retire in 20 years. Currently, they have $225,000 in savings and invest $2,000...

    A couple will retire in 20 years. Currently, they have $225,000 in savings and invest $2,000 in a mutual fund each month that pays a 9% APR (monthly compounding) on average. (assume end of month contributions) A couple wishes to retire in Florence, Italy. The couple will need to withdraw $12,000 per month (beginning of the month) in retirement to live in a nice pension (apartment) near the Ufezi Museum. Their money will earn 3.6% APR with monthly compounding in...

  • David Davis is 30 years and wants to retire when he is 65. So far he...

    David Davis is 30 years and wants to retire when he is 65. So far he has saved (1) $5,670 in an IRA account in which his money is earning 8.3 percent annually and (2) $5,850 in a money market account in which he is earning 5.25 percent annually. David wants to have $1 million when he retires. Starting next year, he plans to invest the same amount of money every year until he retires in a mutual fund in...

  • Richard Miller is 30 years and wants to retire when he is 65. So far he...

    Richard Miller is 30 years and wants to retire when he is 65. So far he has saved (1) $5,600 in an IRA account in which his money is earning 8.3 percent annually and (2) $4,040 in a money market account in which he is earning 5.25 percent annually. Richard wants to have $1 million when he retires. Starting next year, he plans to invest the same amount of money every year until he retires in a mutual fund in...

  • Daniel Jackson is 30 years and wants to retire when he is 65. So far he...

    Daniel Jackson is 30 years and wants to retire when he is 65. So far he has saved (1) $6,730 in an IRA account in which his money is earning 8.3 percent annually and (2) $5,590 in a money market account in which he is earning 5.25 percent annually. Daniel wants to have $1 million when he retires. Starting next year, he plans to invest the same amount of money every year until he retires in a mutual fund in...

  • Consider the two savings plans below. Compare the balances in each plan after 6 years Which...

    Consider the two savings plans below. Compare the balances in each plan after 6 years Which person deposited more money in the plan? Which of the two investment strategies is better? Yolanda deposits $550 per month in an account with an APR of 3%, while Zach deposits $7000 at the end of each year in an account with an APR of 3.5% The balance in Yolanda's saving plan after 6 years was $ (Round the final answer to the nearest...

  • Edward Lewis is 30 years and wants to retire when he is 65. So far he...

    Edward Lewis is 30 years and wants to retire when he is 65. So far he has saved (1) $5,570 in an IRA account in which his money is earning 8.3 percent annually and (2) $4,080 in a money market account in which he is earning 5.25 percent annually. Edward wants to have $1 million when he retires. Starting next year, he plans to invest the same amount of money every year until he retires in a mutual fund in...

  • QUESTION 5 You would like to plan for your retirement. You have gathered or assumed the...

    QUESTION 5 You would like to plan for your retirement. You have gathered or assumed the following information:  You just turned 30 years of age, and currently have zero savings.  You plan to work until you turn 50 years old, at which time you would like to retire. During retirement, assume that you will have no sources of income other than what you can earn on the money that you have saved up for retirement.  For the...

  • You plan to buy your "dream car" when you graduate in 12 months. The cost of the car at that time will be $59,000 . How...

    You plan to buy your "dream car" when you graduate in 12 months. The cost of the car at that time will be $59,000 . How much do you have to invest each month, starting next month, for 29 months to exactly pay for the car if your investments earn 5.00% APR (compounded monthly)? Calculate your answer to the nearest dollar. Write only the number with no dollar sign or comma (e.g., 3711)

  • You plan to buy your "dream car" when you graduate in 12 months. The cost of the car at that time will be $59,000 . How...

    You plan to buy your "dream car" when you graduate in 12 months. The cost of the car at that time will be $59,000 . How much do you have to invest each month, starting next month, for 29 months to exactly pay for the car if your investments earn 5.00% APR (compounded monthly)? Calculate your answer to the nearest dollar. Write only the number with no dollar sign or comma (e.g., 3711)

  • Kevin Hall is 30 years and wants to retire when he is 65. So far he...

    Kevin Hall is 30 years and wants to retire when he is 65. So far he has saved (1) $6,720 in an IRA account in which his money is earning 8.3 percent annually and (2) $5,810 in a money market account in which he is earning 5.25 percent annually. Kevin wants to have $1 million when he retires. Starting next year, he plans to invest the same amount of money every year until he retires in a mutual fund in...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT