You want to have $62,000 in your savings account 3 years fromnow, and you're prepared...

You want to have $62,000 in your savings account 3 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 6.9 percent interest, what amount must you deposit each year?

Expert Solution

The amount is computed as follows:

Future value = Annual deposits x [ [ (1 + r)ⁿ – 1 ] / r ]

$ 62,000 = Annual deposits x [ [ (1 + 0.069)³ - 1 ] / 0.069 ]

$ 62,000 = Annual deposits x 3.211761

Annual deposits = $ 62,000 / 3.211761

Annual deposits = $ 19,304.05 Approximately

jeff jeffy answered 2 years ago

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