Carlos plans to start studying a master’s degree that begins in 3 years. Payments consist of 4 installments of $ 8000 at the beginning of each semester. How much does Carlos have to deposit at the end of each month in a savings account that pays him an effective annual interest rate of 4% in order to pay for his studies?
a. $ 839
b. $ 889
c. $ 917
I can’t understand the problem and it doesn’t come out, please I need help
thank you so much, yeah I know that if you discount PMT will be lower, but wouldnt be answer. A question brother, you mean to I/Y = 4 /12 =0.333 right? In that cast I get pmt = 838.1058.?
The questions says effective annual rate of 4%, which I interpret as 1 compounding per year. I could go through the rigmarole of calculating the equivalent monthly rate (3.92848) and set C/Y to 12, but I will still get 838.99.
probably from
but if thats really the process, i dont agree with how 32000 isnt discounted, and instead of 36, it should be 35, of course the answer will be very different