Acme Annuities recently offered an annuity that pays 5.7 % compounded monthly. What equal monthly deposit should be made into this annuity in order to have $ 104,000 in 14 years?
This is the formula you would use to calculate this:
FV=P{[1 + R]^N - 1/ R}
104,000 = P {[1 + 0.057/12]^(14*12) - 1 / [0.057/12]}
104,000 = P x 256.189897....
P = 104,000 / 256.189897
P =$405.95 - Monthly payment needed to save $104,000 @ 5.7% comp. monthly.
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