You plan to buy the house of your dreams in 15 years. You have estimated that th

Question

You plan to buy the house of your dreams in 15 years. You have estimated that the price of the house will be $76,212 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 14.75 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? Round the answer to two decimal places Your Answer: se Answer tus Save Page 4 of 4 Next Page

Explanation / Answer

this future value with annuity model

PMT = FV*r / ((1+r)n - 1)

n = 15*12 = 180

r = 14.75%/12 = 1.23%

PMT = 76212 *1.23% / ((1+1.23%)180 - 1)

   = 116.86

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