What lump sum of money must be deposited into a bank account at the present time?

what lump sum of money must be deposited into a bank account at the present time so that $500 per month can be withdrawn for five years, with the first withdrawal scheduled for six years from today? the interest rate is 1% per month|||P = $500 * ( 1 - 1.01^60 ) / ( ( 1 - 1.01 ) * 1.01^59 * 1.01^72 )


P = $11,089.98





Note that 1% per month is 12.6825% per year effective which easily beats inflation hands down as inflation is usually about 4% per year effective.|||revsuzanne is completely insane. Inflation is nowhere near 10%, though I'm sure that is what she would like, to make up for the immense losses her silver positions suffered over the past two weeks. Don't believe the lunatics who want you to put all of your money in gold and silver for the inevitable apocalypse. I wonder if Glen Beck is happy that he convinced middle-class Americans to invest in silver (and go bankrupt) such as this person: http://answers.yahoo.com/question/index;鈥?/a>





As far as 1% interest, that is crap. Inflation is not 10%, but 1% interest certainly will not keep up with the average inflation rate.