How to determine monthly deposits to reach a financial goal

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SUMMARY

The discussion focuses on calculating monthly deposits required to save $96,000 over 20 years with a monthly compounding interest rate of 0.5%. The initial amount in the savings account is $0, and the goal is to determine the monthly deposit amount (b) needed to reach the target amount (a_240). The relevant formula involves the future value of a series of cash flows, taking into account the interest rate and the total number of deposits.

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This discussion is beneficial for financial planners, individuals setting long-term savings goals, and anyone interested in understanding the impact of compound interest on savings accounts.

ank91901
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Hi everybody. I'm trying to figure out a somewhat confusing problem about savings accounts.
I want to save 96,000 over the span of 20 years (or 240 months). At the moment there is no money in the account. My account compounds interest monthly at a rate of .5%. How do I determine the amount of money I should be setting back every month to reach my goal?
In sum:
a_0=0
a_240= 96000
r=0.5%=.005
b=monthly deposits, so, how do I find b?

Any input would be greatly appreciated.
 
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hi ank91901! :wink:

show us what you've tried and where you're stuck, and then we'll know how to help! :smile:
 

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