Answer
The periodic deposit is $\$620$
The interest is $\$1,665,200$
Work Step by Step
This is the formula we use to calculate the value of an annuity:
$A = \frac{P~[(1+\frac{r}{n})^{nt}-1]}{\frac{r}{n}}$
$A$ is the future value of the annuity
$P$ is the amount of the periodic deposit
$r$ is the interest rate
$n$ is the number of times per year the interest is compounded
$t$ is the number of years
$A = \frac{P~[(1+\frac{r}{n})^{nt}~-1]}{\frac{r}{n}}$
$P = \frac{A~(\frac{r}{n})}{~(1+\frac{r}{n})^{nt}~-1}$
$P = \frac{(\$2,000,000)~(\frac{0.065}{12})}{~(1+\frac{0.065}{12})^{(12)(45)}~-1}$
$P = \$620$
The periodic deposit is $\$620$
The total amount of money deposited into the annuity is $\$620 \times 540$, which is $\$334,800$
The interest is the difference between the value of the annuity and the total amount deposited. We can calculate the interest.
$interest = \$2,000,000 - \$334,800 = \$1,665,200$
The interest is $\$1,665,200$
