Answer:
The amount which Bob and Kathy deposited monthly is $16366.8
Step-by-step explanation:
Given as :
The amount that will be saved after retirement = A = $500000
The rate of interest applied = 3.9% compounded monthly
The time period = t = 24 years
Let The principal that should be deposited into account = $P
From Compound Interest
Amount = Principal × [tex](1+\dfrac{\textrm rate}{12\times 100})^{\textrm 12\times time}[/tex]
Or, $500000 = $P × [tex](1+\dfrac{\textrm r}{12\times 100})^{\textrm 12\times t}[/tex]
Or, $500000 = $P × [tex](1+\dfrac{\textrm 3.9}{12\times 100})^{\textrm 12\times 24}[/tex]
Or, $500000 = $P × [tex](1.00325)^{288}[/tex]
Or, $500000 = $P × 2.5458
∴ P = [tex]\dfrac{500000}{2.5458}[/tex]
I.e P = $196401.91
So, The amount which they should deposit per month = [tex]\dfrac{196401.91}{12}[/tex] = $16366.8
Hence The amount which Bob and Kathy deposited monthly is $16366.8 Answer
