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    Swenson and Swenson: Savings Account

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    Swenson and Swenson just decided to save $2,200 a month for the next 6 years as a safety net for recessionary periods. The money will be set aside in a separate savings account which pays 5.5% interest compounded monthly. They deposit the first $2,200 today. If the company had wanted to deposit an equivalent lump sum today, how much would they have had to deposit?

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    Solution Preview

    This is a question of the present value of annuities.

    Monthly payment = 2200
    Number of months ...

    Solution Summary

    This solution calculate the amount Swenson and Swenson will need to deposit into their savings account that pays an interest of 5.5% compounded monthly.