Question

You want to have $82,000 in your savings account 13 years from now, and youâre prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.30 percent interest, what amount must you deposit each year? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Annual deposit

Answer 1

Answer:

$3,992.87

Explanation:

To determine the amount that would be deposited every year, the formula to be used is : future value/ annuity factor

Annuity factor = {[(1+r) ^N ] - 1} / r

FV = Future value = $82,000

P = Present value

R = interest rate = 7.3%

N = number of years = 13

= (1.073)^13 - 1 / 0.073 = 20.536622

$82,000 / 20.536622 = $3,992.87

I hope my answer helps you