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Six years from today you need $10,000. You plan to deposit $1,600 annually, with the first...

Six years from today you need $10,000. You plan to deposit $1,600 annually, with the first payment to be made a year from today, in an account that pays a 6% effective annual rate. Your last deposit, which will occur at the end of Year 6, will be for less than $1,600 if less is needed to reach $10,000. How large will your last payment be? Do not round intermediate calculations. Round your answer to the nearest cent.

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It is required to deposit $1,600 annually every year from a year from today for 6 years to get a total of $10,000. The effective annual rate is given as 6% i.e., it yields an interest of 6% on the total amount every year. If the amount in the account is A, it yields a interest of A*r%, which makes the total amount as A+(A*r%) = A*(1+r%). Here we are considering the initial year as year 0 and the deposits are deposited from year 1 to year 6. All the calculations are shown in the below images:

jeff jeffy answered 4 hours ago
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