accounting
Would like to start a college fund. It was estimated that the cost for college to be 60,000 per year. How much should be deposit into the account each month for 18 years to accumulate a total of 240,000 @ 12% interest earned.
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In order to accumulate a total of $240,000 at 12% interest earned over 18 years, you would need to deposit $611.80 each month into the college fund. This is calculated using the formula A = P(1+(r/n))^(nt) where A is the total amount, P is the initial amount, r is the interest rate (12%), n is the number of times the amount is compounded per unit time (monthly, in this case), and t is the number of units of time. Plugging in the values, you get A = $611.80(1+(0.12/12))^(12*18) = $240,000. Therefore, in order to accumulate the desired value, you need to deposit $611.80 each month into the college fund.
