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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.

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Solution Summary

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

Solution Preview

The savings is deposited at the end of each month

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

where
M = ...

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