Question

You find a mutual fund that offers approximately 6% APR compounded monthly. How much will you need to invest each month for the next year in order to have $1000

Answer 1

Answer:

The amount you need to invest is $943.4/12 = $ 78.61 each month for the next year in order to have $1000

Step-by-step explanation:

$A= P(1+r/n)^{nt}$

A= future value

P= Principal value

r= interest rate in decimal

n= no of time interest is compounded

t= time in years.

Using this formula we can find the money needed to invest i.e P

where r = 6% or 0.06

n= 12 , t= 1 and A=1000

$A= P(1+r/n)^{nt}$

$1000= P(1+0.06/12)^{12*1}$

$1000= P(1.06)$

$/frac{1000}{1.06}= P$

$P= 943.4$

The amount you need to invest in a year= $943.4

The amount you need to invest in a month= $943.4/12

                                                                      = $ 78.61

Answer 2

Answer:

$972.84

Step-by-step explanation:

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