A project has unused construction funds that can be deposited into an interest bearing account for later use. The annual effective interest rate of the account is 18%, and interest is compounded monthly. Approximately how much money must be deposited to yield $60,000 at the end of 11 months?
a. $48,750
b. $50,100
c. $50,950
d. $51,550
monthly interest rate = 18% / 12 = 1.5%
F= P *(1+i)^t
60000 = P *(1+0.015)^11
60000 = P *(1.015)^11
P = 60000 / 1.015 ^11
P = 50935.99 ~ 50950
Option C is correct answer
A project has unused construction funds that can be deposited into an interest bearing account for...