The problem with this question is that the interest period and the payment period does not match, so we can't use the standard formula
Secondly, you do not state if the 1.2% is a monthly rate or an annual rate compounded monthly. Seems pretty low for an annual rate, so I will assume it is a monthly rate.
- keep the payment period at weekly
- change 1.2% per month to a weekly rate.
let that weekly rate be i
(1+i)^52 = 1.012^12
1+i = 1.012^(12/52) = 1.0027565....
i = .0027565....
paym( 1.0027565....^260 - 1)/.0027565.... = 10,000
solve for paym, let me know what you get
Mary would like to save $10 000 at the end of 5 years for a future down payment on a car.How much should she deposit at the end of each week in a savings account that pays 1.2%/a, compounded monthly, to meet her goal?
1 answer