I am stuck on a textbook question for a long time now.
What is the amount of quarterly deposits A, such that you will be able to withdraw the amounts in cash flow diagram if the interest rate is 8% compounded monthly ?
My attempt :
I found out the effective interest rate as $2\%$. Now I formed the equation :
$(A(F/P,2\%,4) + A(F/A,2\%,4) - 1500 )*(F/P,2\%,4) + A(F/A,2\%,4) = 2500$
Solving which I get $A = \$422.75$ . But the answer at the back of the book says $\$755.89.$
I don't understand where I am going wrong. Any suggestions as to where I might be going wrong?