You want to have $28,000 saved 3 years from today in order to make a down payment on a house. To fund this, you will make deposits each week from your paycheck into an account that will earn 5.18 percent compounded weekly. How much must you deposit each week

= $165.991

Explanation:

The deposit each week can be determined using the the sinking fund formula.

A sinking fund is an investment plan where a fixed amount of money is deposited into an interest-yielding account to accumulate a target sum in the future.

Equal deposit = FV / annuity factor

Annuity factor = ((1+r) ^ (n) - 1) / r

FV = future amount, - $28,000

r - interest rate per period - 5.18%/52 = 0.0996% per week. Remember that there are 52 weeks in a year

n - number of period = 3 * 52 = 156 weeks

Annuity factor = ((1 + 0.099%) ^ (156) - 1) / 0.0996%

= 168.6835499

Deposit per week

= 28,000 / 168.683

= $165.991

FV = A * ((1+r) ^ (n) - 1) / r