skip to Main Content
Need Help with a custom paper? Get started here

Three years from now a couple plan to spend 4 months traveling in China Japan and Southeast Asia.

Three years from now, a couple plan to spend 4 months traveling in China, Japan, and Southeast Asia. When they take their trip, they would like to withdraw $10,000 at the beginning of each month to cover their expenses for that month. Starting now, how much must they deposit at the beginning of each month for the next 3 years so that the account will provide the money they want while they are traveling? Assume that such an account pays 6.6%, compounded monthly.
Given information: So, k=12 as interest is compounded monthly r = 0.066 (6.6%) P3=$40,000 ($10,000 X 4) N=3 (since it is a 3 year monthly deposit) Now, let d be the amount deposited each month till the next three years Now, we know, Putting the given values in the above formulae, to find d 40000 = d[(1+0.066/12)(12)(3)…

ndash; 1] / (0.066/12) 40000 (0.0055) = d[(1+0.0055)(12)(3) 1] 220 = d [(1.0055)(36) 1] 220 = d [1.218 1] 220 = d [0.218] d=1009.1 Thus, the couple should deposit $1009.1 per month in order to reach their goal.

Need help with this paper? Please follow this link to get started with the perfect academic paper today.

Leave a Reply