Question

You want to have $22,500 saved 4 years from today in order to make a down...

You want to have $22,500 saved 4 years from today in order to make a down payment on a house. To fund this, you will make deposits each week from your paycheck into an account that will earn 4.63 percent compounded weekly. How much must you deposit each week?

Homework Answers

Answer #1

Future value(FV) = $22,500

Weekly interest(r) = 4.63%

Time = 4 years = 52 weeks * 4 = 208 weeks.

As there are 365 days in a year, there will be 5 additional days accumulated in 4 years' time.

Hence Time(t) = 208 + 5/7 = 208.71 weeks

We can calculate the weekly installments by using a financial calculator or by using excel,

Time 208.71
FV $22,500
Interest rate 4.63%
Pmt $0.082274

Hence in order to save 22500 in 4 years' time, we have to deposit 0.0822(approx) every week.

If you have any doubts please let me know in the comments. Please give a positive rating if the answer is helpful to you. Thanks.

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