Question

How much must be deposited at the beginning of each year to accumulate to $10,000 in four years if interest is at 9%

Answer 1

Answer:

Annual deposit= $2,186.69

Explanation:

Giving the following information:

Future value= $10,000

Number of peridos= 4 years

Interest rate= 9% compounded annually

To calculate the annual deposit required, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (10,000*0.09) / [(1.09^4) - 1]

A= $2,186.69