Alexis want to buy a house in 5 years. She wants to save $75,000 over the next five years for a down payment. If she can earn an
annual rate of 9% on her savings, how much must she deposit in equal payments at the end of each month for the next five years to reach her goal
1 answer:
Answer:
the monthly payment is $994.38
Explanation:
For computing the deposit amount made in equal payment for the next five years we need to apply the PMT formula i.e. to be shown in the attachment below:
Given that,
Present value = $0
Future value or Face value = $75,000
RATE = 9% ÷ 12 = 0.75%
NPER = 5 years × 12 = 60 years
The formula is shown below:
= PMT(RATE;NPER;PV;-FV;type)
The future value come in negative
So, after applying the above formula, the monthly payment is $994.38
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