Question

You’re prepared to make monthly payments of $175, beginning at the end of this month, into an account that pays 7 percent interest compounded monthly. How many payments will you have made when your account balance reaches $15,000?

Answer 1

Answer:

86 payments approximately

Explanation:

First;

Find the monthly average interest rate,

=7%/12

=0.0058333333

Second;

Add the monthly average interest rate to the monthly payment

= $175 + 0.0058333333

= $175.00583333 (average total monthly balance)

Third;

Divide final account balance by the average total monthly balance

= 15,000 / 175.00583333

=85.71 payments.