Mary would like to save $10,000 at the end of 5 years for a future down payment on a car. How much should she deposit at the end of each week in a savings account that pays 1.2%, compounded monthly, to meet her goal?
This type of a savings account is known as a sinking fund. The monthly payment M required to produce the desired amount of money (Future Value, or FV), when the period interest rate is R, is determined by the formula
`M = FV*R/((1+R)^N - 1)` , where N is the number of periods.
In this problem, the future value is FV =...
(The entire section contains 157 words.)
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