Answer:
The amount to invest each year for 13 years is $5,617.37.
Explanation:
This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = current level of consumption = $52,672
P = amount to invest each year = ?
r = annual nominal interest rate = 5.03%, or 0.0503
n = number of years = 13
Substituting the values into equation (1) and solve for n, we have:
$52,672 = P * ((1 - (1 / (1 + 0.0503))^13) / 0.0503)
$52,672 = P * 9.37662983027493
P = $52,672 / 9.37662983027493
P = $5,617.37
Therefore, the amount to invest each year for 13 years is $5,617.37.
