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Your dream is to climb Mount Everest. The expedition will cost $72,000, which you plan to...

Your dream is to climb Mount Everest. The expedition will cost $72,000, which you plan to save over the next 6 years. How much would you have to save each month to accumulate sufficient funds if your deposits earn a stated interest rate of 6.00 per year%?
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Answer #1

We will calculate the equal instalment using the Future Value of annuity function

FV =

Where FV is 72000

PMT is the monthly deposit (which will be calculated)

r is the compounding rate = 6/12 = 0.5% or 0.005

n = no of deposits = 6x12 = 72

Rearranging the formula we get

PMT =

          =

          = 360 / 0.4320

          = 833.33

Therefore the monthly deposit for 6 years to reach $72000 at the end @6% per year is $833.33

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