# Thread: Interest problem

1. ## Interest problem

Your brother would like to have $29,000.00 in 3 years for the purchase of a new car. What monthly payment should he make into an account paying 6% per year compounded monthly to attain his goal? 2. You simply MUST learn to manipulate "Basic Principles". i = 0.06 m = i/12 = 0.06/12 = 0.005 a = 1+m = 1.005 P is the desired payment. Now think about the 36 payments. The first will be credited interrest 36 times. The last only once. This gives.$\displaystyle P(a^{36} + a^{35} + ... + a) = 29000\$

Can you add up the Geometric Sequence in the parentheses?

3. ## Thank you!

Yes, I *can* do that part. Sorry, I'm much more of an English person, to be honest. I was trying to match this problem with either Future/Present Annuity, Sinking Funds, Amortization, etc and didn't even think about using geometric progression.

THANK YOU, TK. Thanks for your patience with me.