You want to have $44,000 in your savings account 4 years from now, and you're prepared...

You want to have $44,000 in your savings account 4 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.7 percent interest, what amount must you deposit each year?

Multiple Choice

$11,000.00
$12,997.70
$9,807.92
$3,388.03
$3,387.97

Expert Solution

Future value of an ordinary annuity = Annual deposits{[(1 + r)^n - 1] / r}

$44,000 = Annual deposits{[(1 + 0.077)^4 - 1] / 0.077}

$44,000 = Annual deposits(4.486172533)

Annual deposits = $44,000 / 4.486172533

Annual deposits = $9,807.92

jeff jeffy answered 2 years ago

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