Suppose you want to accumulate $10,000 for a down payment for a house

Economics Aug 12, 2020

Suppose you want to accumulate $10,000 for a down payment for a house. You will deposit $400 at the beginning of every month in an account that credits interest monthly at the rate of 0.6% per month. HOW long will it take you to achieve your goal?

Expert Solution

We can calculate the number of payment period by using the following formula in excel:-

=nper(rate,pmt,pv,-fv,type)

Here,

Nper = Number of payments period

Rate = 0.6%

Pmt = $400

PV = $0

FV = $10,000

Type = 1

Substituting the values in formula:

= nper(0.6%,400,0,-10000,1)

= 23.23 months

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