In: Economics
what is the present worth of $2,757 in year 1 and amounts increasing by $109 per year through year 5 at an interest rate of 10% per year?
if an investment account gives 5% interest annually, how much equal annual deposits you have to make for 10 years starting year 1 to have a $174,468 at your account at the end of this investment.
what is the present worth
=2757/(1+10%)^1+(2757+109*1)/(1+10%)^2+(2757+109*2)/(1+10%)^3+(2757+109*3)/(1+10%)^4+(2757+109*4)/(1+10%)^5
=11199.14
equal annual deposits=174468/(((1+5%)^10-1)/5%)=13871