Need help calculating this

Business & Finance
Tutor: None Selected Time limit: 1 Day

You plan to buy the house of your dreams in 6 years. You have estimated that the price of the house will be $78,372 at that time. You are able to make equal deposits every month at the end of the month into a savings account at an annual rate of 5.50 percent, compounded monthly. How much money should you place in this savings account every month in order to accumulate the required amount to buy the house of your dreams? 

Sep 1st, 2015

Thank you for the opportunity to help you with your question!

78,372 = c ( 1-1/ 4.583 ^2) /.4583 

Based on the equation, it would take a deposit of at least 11 , 673$.  



Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 1st, 2015

Wait, I have a correction. 


Sep 1st, 2015

I noticed that I calculated for 72,000 instead of 78,372 . 

78,372 = 0 + 4310.46 (interest accumulated) 

Minus it from the left, 

78,372 - 4310.46= 74,061.54 

Then divide that by each year


74,061 / 6 =12,343.59


You would need $ 12,343.59   every deposit. 

Sep 1st, 2015

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