Answer:
They should deposit $81.38 monthly.
Step-by-step explanation:
We know that,
[tex]\text{FV of annuity}=P\left(\dfrac{(1+r)^n-1}{r}\right )[/tex]
where,
FV of annuity = $35,450
P = monthly payment,
r = rate of interest = 5.5% annually = [tex]\dfrac{5.5}{12}\%[/tex]
n = number period = 20 years = 240 months
Putting all the values,
[tex]\Rightarrow 35450=P\left(\dfrac{(1+\frac{0.055}{12})^{240}-1}{\frac{0.055}{12}}\right )[/tex]
[tex]\Rightarrow P\dfrac{35450}{\left(\dfrac{(1+\frac{0.055}{12})^{240}-1}{\frac{0.055}{12}}\right )}[/tex]
[tex]\Rightarrow P=\$81.38[/tex]
Therefore, they should deposit $81.38 monthly.
