Question

Your goal is to have $17,500 in your bank account by the end of six years. If the interest rate remains constant at 5% and you want to make annual identical deposits, how much will you need to deposit in your account at the end of each year to reach your goal?

Answer 1

$2,573

Step-by-step explanation:

FV = $17,500. This is your goal to achieve by the end of 6 years

i/r = 5%

n = 6 years

PV = 0

PMT (The amount of annual deposit required to achieve the goal. This is the missing value we need to calculate).

By using financial calculator, we obtain:

PMT = $2,573