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3 November, 15:24

David wishes to accumulate $1 million by the end of 20 years by making equal annual end-of-year deposits over the next 20 years. if david can earn 10 percent on his investments, how much must he deposit at the end of each year? $50,000 $17,460 $14,900 $117,453

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  1. 3 November, 16:59
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    The formula of the future value of an annuity ordinary is

    Fv=pmt [ (1+r) ^ (n) - 1) : r]

    Fv accumulated amount 1000000

    PMT annual payment?

    R interest rate. 0.1

    N time 20 years

    Solve the formula for PMT

    PMT=FV:[ (1+r) ^ (n) - 1) : r]

    PMT=1,000,000: (((1+0.1) ^ (20) - 1) : (0.1))

    PMT=17,459.62 round your answer

    PMT=17460
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