The applicable formula is;
A = P(1+r)^nt
Where
A = Accumulate amount
P = Initial invested amount
r = Annual interest rate
n = Number of payments in a year
t = Time in years
First part of the question: Accumulated amount after 18 years
Substituting;
A = 1000(1+0.01)^12*18 = $8,578.61
Since the car costs $15,000 and the amount in the bank after 18 years is $8,578.61, Anthony wouldn't be able to afford the car.
Second part of the question: The amount which should have been deposited for Antony to afford the car after 18 years
15,000 = P (1+0.01)^12*18
15,000 = P*8.5786
P = 15,000/8.5786 = $1,748.54
Therefore, for Antony to afford the $15,000 after 18 years, the mum should have deposited $1,748.54.
