Howard is saving for a long holiday. He deposits a fixed amount every month in a...

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Howard is saving for a long holiday. He deposits a fixed amount every month in a...

Howard is saving for a long holiday. He deposits a fixed amount every month in a bank account with an EAR of 8.2%. If this account pays interest every month then how much should he save from each monthly paycheck in order to have $ 8,000 in the account in four years' time?

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Answer 1

Answer #1

Saving per month (P) FVA: ([(1+r)^n-1]=r) Here, 7.91% = (1+8.2%)^(1/12)-1)*12 A Interest rate per annum B Number of years C N

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