Abigail would like to have $55,000 to purchase a tiny house without getting a loan in 10 years. How much would she need to invest each month in an account paying 4.15% interest rate compounded monthly to accumulate $55,000 to purchase a tiny house in 10 years?

Part a) (2 pts) Which formula is appropriate for this problem? (Simple Interest, Compound Interest, Savings Annuity, Payout Annuity, Monthly Payment on a Loan, Maximum Loan Amount, Future Value Needed (if making a one-time deposit), or Future Value Needed (if making multiple deposits))

Part b) (5 pts) How much should Abigail invest each month to be able to afford a tiny house?

• Write out
  • 1) the correct formula with variables (e.g. P₀, P_N, N, r, etc.), and
  • 2) the correct formula with the numerical values (round your answer to the nearest cent), and
  • 3) write the answer in a complete sentence.