A company plans to replace one of its machines 5 years from now. If they deposit $6,827 a month in an account that gives them 0.65% interest per month. How much money will they still need to pay for the machine if the cost is $1,123,553 at that time in the future?

They would require $624,532.94 more

Explanation:

The first task is to compute the future value of the monthly deposit of $6,827 with an interest of 0.65% per month for five years.

=fv (rate, nper,-pmt, pv)

rate id 0.65% per month

nper is the number of deposits = 5 years*12=60

pmt is the monthly deposit of $6,827

pv is the present value of deposits, it is unknown and taken as zero

=fv (0.65%,60,-6827,0) = $499,020.06

balance of the required funds=required funds-future value of the deposits

balance of required funds = $1,123,553-$499,020.06=$624,532.94