Question

You would like to have $260,000 in 18 years by making regular deposits at the end of each month in an annuity that pays an annual interest rate of 4.5% compounded monthly. How much of the $260,000 comes from interest? In your calculations, do not round until the final answer. Then, round the monthly payment to the nearest dollar.

Answer 1

Monthly Deposit $1,152.09924
Deposited $248,853.44
Interest $11,146.56

Month Balance
1 $1,152.10
2 $2,356.04
3 $3,559.99
4 $4,763.93
5 $5,967.87
6 $7,171.82
7 $8,375.76
8 $9,579.71
9 $10,783.65
10 $11,987.59
11 $13,191.54
12 $14,395.48
13 $15,599.42
14 $16,803.37
15 $18,007.31
16 $19,211.25
17 $20,415.20
18 $21,619.14
19 $22,823.09
20 $24,027.03
21 $25,230.97
22 $26,434.92
23 $27,638.86
24 $28,842.80
25 $30,046.75
26 $31,250.69
27 $32,454.64
28 $33,658.58
29 $34,862.52
30 $36,066.47
31 $37,270.41
32 $38,474.35
33 $39,678.30
34 $40,882.24
35 $42,086.19
36 $43,290.13
37 $44,494.07
38 $45,698.02
39 $46,901.96
40 $48,105.90
41 $49,309.85
42 $50,513.79
43 $51,717.73
44 $52,921.68
45 $54,125.62
46 $55,329.57
47 $56,533.51
48 $57,737.45
49 $58,941.40
50 $60,145.34
51 $61,349.28
52 $62,553.23
53 $63,757.17
54 $64,961.12
55 $66,165.06
56 $67,369.00
57 $68,572.95
58 $69,776.89
59 $70,980.83
60 $72,184.78
61 $73,388.72
62 $74,592.67
63 $75,796.61
64 $77,000.55
65 $78,204.50
66 $79,408.44
67 $80,612.38
68 $81,816.33
69 $83,020.27
70 $84,224.21
71 $85,428.16
72 $86,632.10
73 $87,836.05
74 $89,039.99
75 $90,243.93
76 $91,447.88
77 $92,651.82
78 $93,855.76
79 $95,059.71
80 $96,263.65
81 $97,467.60
82 $98,671.54
83 $99,875.48
84 $101,079.43
85 $102,283.37
86 $103,487.31
87 $104,691.26
88 $105,895.20
89 $107,099.15
90 $108,303.09
91 $109,507.03
92 $110,710.98
93 $111,914.92
94 $113,118.86
95 $114,322.81
96 $115,526.75
97 $116,730.69
98 $117,934.64
99 $119,138.58
100 $120,342.53
101 $121,546.47
102 $122,750.41
103 $123,954.36
104 $125,158.30
105 $126,362.24
106 $127,566.19
107 $128,770.13
108 $129,974.08
109 $131,178.02
110 $132,381.96
111 $133,585.91
112 $134,789.85
113 $135,993.79
114 $137,197.74
115 $138,401.68
116 $139,605.63
117 $140,809.57
118 $142,013.51
119 $143,217.46
120 $144,421.40
121 $145,625.34
122 $146,829.29
123 $148,033.23
124 $149,237.18
125 $150,441.12
126 $151,645.06
127 $152,849.01
128 $154,052.95
129 $155,256.89
130 $156,460.84
131 $157,664.78
132 $158,868.72
133 $160,072.67
134 $161,276.61
135 $162,480.56
136 $163,684.50
137 $164,888.44
138 $166,092.39
139 $167,296.33
140 $168,500.27
141 $169,704.22
142 $170,908.16
143 $172,112.11
144 $173,316.05
145 $174,519.99
146 $175,723.94
147 $176,927.88
148 $178,131.82
149 $179,335.77
150 $180,539.71
151 $181,743.66
152 $182,947.60
153 $184,151.54
154 $185,355.49
155 $186,559.43
156 $187,763.37
157 $188,967.32
158 $190,171.26
159 $191,375.20
160 $192,579.15
161 $193,783.09
162 $194,987.04
163 $196,190.98
164 $197,394.92
165 $198,598.87
166 $199,802.81
167 $201,006.75
168 $202,210.70
169 $203,414.64
170 $204,618.59
171 $205,822.53
172 $207,026.47
173 $208,230.42
174 $209,434.36
175 $210,638.30
176 $211,842.25
177 $213,046.19
178 $214,250.14
179 $215,454.08
180 $216,658.02
181 $217,861.97
182 $219,065.91
183 $220,269.85
184 $221,473.80
185 $222,677.74
186 $223,881.68
187 $225,085.63
188 $226,289.57
189 $227,493.52
190 $228,697.46
191 $229,901.40
192 $231,105.35
193 $232,309.29
194 $233,513.23
195 $234,717.18
196 $235,921.12
197 $237,125.07
198 $238,329.01
199 $239,532.95
200 $240,736.90
201 $241,940.84
202 $243,144.78
203 $244,348.73
204 $245,552.67
205 $246,756.62
206 $247,960.56
207 $249,164.50
208 $250,368.45
209 $251,572.39
210 $252,776.33
211 $253,980.28
212 $255,184.22
213 $256,388.16
214 $257,592.11
215 $258,796.05
216 $260,000.00

This is the answer in the hypothetical reality proposed. In practical application this is not applicable.