Derek wants to withdraw $11,886.00 from his account 3.00 years from today and $12,955.00 from his...

Derek wants to withdraw $11,886.00 from his account 3.00 years from today and $12,955.00 from his account 14.00 years from today. He currently has $2,195.00 in the account. How much must he deposit each year for the next 14.0 years? Assume a 5.19% interest rate. His account must equal zero by year 14.0 but may be negative prior to that. Please use a financial calculator and show steps please

Solutions

Expert Solution

Let value of annuity of x,

11,886(1.0519)¹¹ + 12,955 = 2,195(1.0519)¹⁴ + x

x = $29,235.07

Calculating Annual Deposit Required,

Using TVM Calculation,

PMT = [FV = 29,235.07, PV = 0, N = 14, I = 0.0519]

PMT = $1,472.13

Annual Deposit = $1,472.13

jeff jeffy answered 2 years ago

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