Problem #1 -
You need to accumulate $86,980 for your son's education. You have decided to place equal year-end deposits in a savings account for the next 12 years. The savings account pays 5.85 percent per year, compounded annually. How much will each annual payment be?
I'm using the following formula but my answe is coming back wrong
=PMT(5.85% /12,12,0,86980,) = 7,056.04 however the correct answer should be 5,201.24 not sure what I'm missing
Problem #2 -
You plan to buy the house of your dreams in 5 years. You have estimated that the price of the house will be $117,573 at that time. You are able to make equal deposits every month at the end of the month into a savings account at an annual rate of 6.08 percent, compounded monthly. How much money should you place in this savings account every month in order to accumulate the required amount to buy the house of your dreams?
I'm using the following formula but my answet is coming back wrong
= PMT(6.08%/5,12*5,0,117573)
I submitted 1,342.25 but the correct answer is 1681.69