Math Questions and Answers

Start Your Free Trial

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?

Expert Answers info

Inna Shpiro eNotes educator | Certified Educator

calendarEducator since 2013

write619 answers

starTop subjects are Math, Science, and Literature

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.)

Unlock This Answer Now


check Approved by eNotes Editorial