Jessica wants to accumulate $11,000 by the end of 4 years in a special bank account, which she had opened for this purpose. to achieve this goal, jessica plans to deposit a fixed sum of money into the account at the end of the month over the 4-year period. if the bank pays interest at the rate of 6% per year compounded monthly, how much does she have to deposit each month into her account? (round your answer to the nearest cent.)

Ans. Jessica has to make monthly deposits of $203.34 in order to get $11,000 at the end of the fourth year, at a rate of 6% compounded monthly.

Step-by-step explanation:

Hi, the first thing to do is to convert that compounded rate into an effective rate, that is by just dividing by 12, therefore, 0.06/12=0.005 or 0.5% effective monthly.

We also know that this deposits are going to take place at the end of every month, for 4 years, that means 48 months.

And to find the value of the monthly deposit, we need to use the following equation and solve for A

Filling it up, we get:

Best of luck

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step-by-step explanation:

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