Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $ at the end of years. To do t

Question

3 years ago

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Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $ at the end of years. To do t

his you plan on depositing an equal amount into the bank at the end of each year. If the bank is willing to pay percent compounded annually, how much must you deposit each year to reach your goal?

Business

1 answer:

Gemiola [76] · Answer 1 · 2022-07-30T20:08:01+03:00

Answer:

$783.87

Explanation:

Complete question <em>"To pay for your child's education, you wish to have accumulated $10,000 at the end of 8 years. To dothis, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 13 percent compoundedannually, how much must you deposit each year to obtain yourgoal?"</em>

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NPER = 8

FV = 10,000

Rate = 13%

PV = 0

Future Value of Annuity = PMT(Rate, NPER, PV, FV)

Future Value of Annuity = PMT(13%, 8, 10000, 0)

Future Value of Annuity = 783.8671964727014

Future Value of Annuity = $783.87

So, one must deposit $783.87 each year to reach the goal.

Solving for PMT of an annuity​) To pay for your​ child's education, you wish to have accumulated ​$ at the end of years. To do t

Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $ at the end of years. To do t