Asked by urmom
Winston wants to save $8900 to buy a used car in 2 years. If his savings account earns interest at 7.8%
compounded weekly, how much does he need to deposit each week?
compounded weekly, how much does he need to deposit each week?
Answers
Answered by
oobleck
assuming an ordinary annuity, just use the formula
FV = P((1+i)^n - 1)/i)
since your weekly rate is 7.8%/52 = 0.0015, and 2 years is 104 weeks, that would mean you want P such that
P(1.0015^104 - 1)/0.0015 = 8900
so now just crank it out.
FV = P((1+i)^n - 1)/i)
since your weekly rate is 7.8%/52 = 0.0015, and 2 years is 104 weeks, that would mean you want P such that
P(1.0015^104 - 1)/0.0015 = 8900
so now just crank it out.
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