Solve the problem.
-Suppose you contribute to a fund that earns 11.9% annual interest. What should your monthly payment be if you want to accumulate $340,000 in 17 years?
A) $415.87
B) $623.80
C) $519.84
D) $779.76

Question

Quizplus · Accepted Answer

To find the monthly payment needed to accumulate $340,000 in 17 years with an annual interest rate of 11.9%, we use the future value of an annuity formula: $FV = P \times \left( \frac{(1 + r)^n - 1}{r} \right)$, where FV is the future value ($340,000), P is the monthly payment, r is the monthly interest rate (11.9% annual rate divided by 12 months = 0.99167%), and n is the total number of payments (17 years * 12 months/year = 204 payments). Rearranging the formula to solve for P gives us the monthly payment amount. Plugging in the values, we find that the correct monthly payment is approximately $519.84.

Solve the Problem. -Suppose You Contribute to a Fund That Earns 11.9% Annual