In: Finance
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
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