1. Assuming a yearly interest rate of 6%, compounded monthly, what must the deposit be in 2015 to obtain a balance of $500,000 in 2025?
I assumed a=500,000(1+.06/12)^12(10)= $909,699
but this girl in class had a different answer.
(i don't know how she got this. i did it on my calculator but i don't know which formula she used.)
2. In the above problem, instead of an initial deposit in 2015, contributions are made at the end of each month. To obtain the same nal balance of $500,000, what must the size of each contribution be?
i'm confused on this one. wouldn't it be a monthly compound too if she is making contributions at the end of each month? and i also do not know which formula to use for this problem.
please help. (;A;)