Compound Interest

[SuperLiciousMilf]

I am stuck on this. I am apparently going wrong in my calculations but I am not sure where or why?!

Suppose you want your daughter's college fund to contain $125,000 after 14 years. I you can get an APR of 7.8%, compounded monthly, how much should you deposit at the end of each month?

PMT=A x APR/N
-------------
[(1 + APR/N) nY -1]

Ok so I am getting 125,000 x .078/12 which is 812.50
Then we get 1+ .078/12 x 12x14 - 1= 14.092 (I do it another way by dividing the apr/n first then adding 1 then multiply by 168 -1 and get 168.092)
I divide the 2 and get $ 57.65 as a monthly payment and then the other way i get 4.83.
Please help me! lol



I keep getting the wrong answer on this one as well =/

Suppose you have 15 months in which to save $1800 for a vacation cruise. If you can earn an APR of 3.7%, compounded monthly, how much should you deposit at the end of each month?

PMT=A x APR/N
-------------
[(1 + APR/N) nY -1]
This time I get 1800x .037/12= 5.55
Then 1+ .037/12 x 12x15-1 =179.55
I divide and get 0.0309??
Where am I going wrong?
Thanks!

 

[Deleted member 4993]

I am stuck on this. I am apparently going wrong in my calculations but I am not sure where or why?!

Suppose you want your daughter's college fund to contain $125,000 after 14 years. I you can get an APR of 7.8%, compounded monthly, how much should you deposit at the end of each month?

PMT=A x APR/N
-------------
[(1 + APR/N) nY -1]

Ok so I am getting 125,000 x .078/12 which is 812.50
Then we get 1+ .078/12 x 12x14 - 1= 14.092 (I do it another way by dividing the apr/n first then adding 1 then multiply by 168 -1 and get 168.092)

That is not multiply - it is power

I divide the 2 and get $ 57.65 as a monthly payment and then the other way i get 4.83.
Please help me! lol



I keep getting the wrong answer on this one as well =/

Suppose you have 15 months in which to save $1800 for a vacation cruise. If you can earn an APR of 3.7%, compounded monthly, how much should you deposit at the end of each month?

PMT=A x APR/N
-------------
[(1 + APR/N) nY -1]
This time I get 1800x .037/12= 5.55
Then 1+ .037/12 x 12x15-1 =179.55
I divide and get 0.0309??
Where am I going wrong?
Thanks!

\(\displaystyle P = \frac{125000 * \frac{.078}{12}}{(1 +\frac{.078}{12})^{168} - 1} = \text $412.50\)

\(\displaystyle P = \frac{A * \frac{r}{12}}{(1 +\frac{r}{12})^{12Y} - 1}\)

 

[Denis]

Then we get 1+ .078/12 x 12x14 - 1= 14.092

That should be (1 + .078/12)^(12*14) - 1 = 1.0065^168 - 1

Please don't use "x" as multiplication symbol; use *