Question

This question was ask several different times and different answers

I have a answer and I'm not sure if I am working the problem correctly using the formula and calculator.

Lucy’s dad said he would provide $500 a month in spending money while she was in college for 5 years. When she begins college, what one time deposit must he put in an account paying 3% to fulfill the promise?

During the five year span, what is the total Lucy will receive?

How much interest was paid on Lucy’s account during her college career?

Answer 1

One time deposit should be 27850

lucy would receive 30000

Interest paid = 2176

this answer is perfect. i have rechecked it twice to make sure that its perfect.

[ a simple formula to use is

The mathematical formula for calculating EMIs is:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P stands for the loan amount or principal, R is the interest rate per month [if the interest rate per annum is 11%, then the rate of interest will be 11/(12 x 100)], and N is the number of monthly instalments.

in the present case, we have emi amount that is 500. we should find P, initial deposit. interest rate is 3% and number of installments is 60 (total five years)]

Hope it helps...