Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 7 %7%. How much should you deposit monthly to accumulate &82,000 in 12 years?
It depends whether the deposits are made at the beginning of or at the end of each month:
1) =$364.94 you must deposit at the end of each month @7% comp. monthly.
2) =$362.82 you must deposit at the beginning of each month @ 7% comp. monthly.
3) The formula you use to calculate this is: FV=P{[1 + R]^N - 1/ R}=FV OF $1 PER PERIOD.
Where R=Interest rate per period, N=number of periods, P=periodic payment, FV=Future value.
