Can anyone help me figure out the ordinary annuity?

[MG94]

Find the monthly payment, R, needed to have a sinking fund accumulate the future value,A. The yearly interest rate,r, and the number of payments,n, are given.Interest is compounded monthly.Use the formula for finding the future value of an ordinary annuity. A=10,000 r=8% n=60 It says I have to round to the nearest cent as needed.

This is for a college math course and I have done the problem a few times but I keep getting it wrong!

 

[JeffM]

ok, I suspect our answers are the same except that I used 12x the interest rate you did.

Romsek

It is conventional in finance to quote an interest rate in terms of a year. So if the period of compounding is months, the interest rate to be used is r /12. If interest is compounded daily, it is r / 365. People who are careful write the rate as r per cent per annum or r% p.a. to make that clear. Not likely that a student would post that carefully.