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7 June, 10:53

You decide to start saving up to buy your first home. You find an account that pays 8% interest compounded monthly. If you plan on purchasing your home in ten years, how much must you put into the account to have $50,000 for a down payment?

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  1. 7 June, 11:18
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    The formula is

    A=p (1+r/k) ^kt

    A down payment 50000

    P the amount you must put?

    R interest rate 0.08

    K compounded monthly 12

    T time 10 years

    Solve the formula for p

    P=A: (1+r/k) ^kt

    P=50,000: (1+0.08:12) ^ (12*10)

    p=22,526.17
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