## Deposits of \$850 per month are made into an investment account. The interest rate is 6.5% per annum compounding monthly.

Question

Deposits of \$850 per month are made into an investment account.
The interest rate is 6.5% per annum compounding monthly.
How long will it take for the investment to reach \$100 000?

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4 days 2023-01-08T15:49:41+00:00 1 Answer 0 views 0

1. For the investment to reach \$100,000 with monthly deposits of \$850 at 6.5% compounded monthly, it will take 188 months or 15 years and 8 months.

### How is the period of investment calculated?

To calculate the period of investment, we can use an online finance calculator as follows:

### Data and Calculations:

I/Y (Interest per year) = 6.5%
PV (Present Value) = \$0
PMT (Periodic Payment) = \$850
FV (Future Value) = \$100,000
P/Y (# of periods per year) = 12
C/Y (# of times interest compound per year) = 12
Results:
N = 187.717 months
Sum of all periodic payments = \$159,559.45 (187.717 x \$850)
Total Interest = \$59,559.45
Thus, it will take 188 months for the investment to reach \$100,000.