Question

You want to have $25,000 in your savings account eight years from now, and you're prepared to make equal annual deposits into the account at the end of each year. required: if the account pays 4.75 percent interest, what amount must you deposit each year?

Answer 1

FVA=C{[(1+r)^t-1]/r}

$25,000=$C[(1.0475^8-1)/0.0475]

We can now solve this equation for the annuity payment.:
C=$25,000/9.46
C=$2,641.55