Explore BrainMass

Explore BrainMass

    monthly savings

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A new parent wants to have $80,000 in a college savings account in 18 years.
    Although it's difficult to predict what the APR will be over 18 years, we can get a sense of how much the parent should save each month using various assumptions. Calculate the monthly savings needed if the money is invested
    in an account with monthly compounding and an APR of
    4 percent
    7 percent
    9 percent.

    © BrainMass Inc. brainmass.com June 3, 2020, 11:36 pm ad1c9bdddf
    https://brainmass.com/business/business-math/monthly-savings-287026

    Solution Preview

    The savings is deposited at the end of each month

    P = M([1+(i/q)]^nq -1)q/i

    where
    M = ...

    Solution Summary

    The solution calculates the monthly savings needed if the money is invested in an account with monthly compounding.

    $2.19

    ADVERTISEMENT