Solve
Step
i = 0.9 ÷ 12 = 0.0075
n = 10 years
You want to deposit enough money into the bank so that you can withdraw $10,000 at the end of each month for 10 years. If the banks pays 9% interest compounded monthly, how much money should you deposit?
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Solve |
Step |
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i = 0.9 ÷ 12 = 0.0075 |
k = 12, r = 0.09, Monthly means 12 times a year |
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P
is payment = 10,000 n = 10 years |
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Find the Present Value |
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| You would have to deposit $789,416.93 so that you can withdraw $10,000 a month for 10 years. | |
| Enter 10,000 × ( 1 - 1.0075 xy - 120 ) ÷ .0075 [enter or =] in your calculator | |
| Hint: don't round until you are completely finished with your calculations. | |