You need to accumulate $10,000. To do so, you plan to make deposits of $1,250 peryear—...

You need to accumulate $10,000. To do so, you plan to make deposits of $1,250 peryear— with the first payment being made a year from today —into a bank account that pays 12% annual interest .Your last deposit will be less than $1,250 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal ,and how large will the last deposit be?

Expert Solution

Time	Opening Balance	Interest	Total Balance	Deposits	Closing Balance
1.00	-	-	-	1,250.00	1,250.00
2.00	1,250.00	150.00	1,400.00	1,250.00	2,650.00
3.00	2,650.00	318.00	2,968.00	1,250.00	4,218.00
4.00	4,218.00	506.16	4,724.16	1,250.00	5,974.16
5.00	5,974.16	716.90	6,691.06	1,250.00	7,941.06
6.00	7,941.06	952.93	8,893.99	1,106.01	10,000.00

It will take 6years to reach goalof 10,000
Last deposit would be 1,106.01

jeff jeffy answered 2 years ago

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You need to accumulate $10,000. To do so, you plan to make deposits of $1,250 peryear—...

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