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

Answer ( 1 )

    0
    2023-01-08T15:51:19+00:00
    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.
    Learn more about investment periods at https://brainly.com/question/20392017
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