# Finance homework help

Anonymous
timer Asked: Nov 30th, 2015
account_balance_wallet \$5

### Question Description

A Person is planning to open a savings account with the intent to buy a house in 5 years. They will invest an equal amount each month for 5 years. This account will earn 6% per year (.5 per month) and will have \$300,000 at the end of the 5-year term.

What is the amount of the monthly investment? I do not even know how to calculate this one.

mickeygabz
School: New York University

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

Is the interest compounded monthly or yearly?

FORMULA

P= FV (r)/(1+r)^n -1

IF COMPOUNDED MONTHLY

P = 300,000 * 0.005/ (1.005) ^60 -1

MONTHLY PAYMENT = P= \$4,992.63

Please let me know if you need any clarification. I'm always happy to answer your questions.

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Anonymous
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