Answer:
$3,529.51
Explanation:
Future value = $120,000
N = 18
i = 7%
Future value = Annual savings * [(1 + Interest rate)^Years - 1] / Interest rate
Future value = Annual savings * [(1 + 0.07)^18 - 1 / 0.07]
Annual savings = $120,000 / [(1 + 0.07)^18 - 1 / 0.07]
Annual savings = $120,000 / 2.37993227573 / 0.07
Annual savings = $120,000 / 33.99903251042857
Annual savings = $3529.512199007199
Annual savings = $3,529.51
Therefore, the annual savings is $3,529.51
