Question

Steve Hitchcock is 39 years old today and he wishes to accumulate $513,000 by his 63 rd birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his 39 th through his 62 th birthdays. What annual deposit must Steve make if the fund will earn 8% interest compounded annually

Answer 1

Annual deposit = $8208

Step-by-step explanation:

Below is the calculation:

Future value of money, FV = $513000

Time period from 39 to 62 = 23 years

Interest rate = 8%

Annual deposit = FV (A/F, n, r)

Annual deposit = 513000 (A/F, 23, 8%)

Annual deposit = 513000 x 0.016

Annual deposit = $8208