You need to accumulate $10,000. To do so, you plan to make deposits of $1,950 per...

You need to accumulate $10,000. To do so, you plan to make deposits of $1,950 per year - with the first payment being made a year from today - into a bank account that pays 6.5% annual interest. Your last deposit will be less than $1,950 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal? Do not round intermediate calculations. Round your answer up to the nearest whole number.

______ year(s)

How large will the last deposit be? Do not round intermediate calculations. Round your answer to the nearest cent.

$___________

Expert Solution

1. How many years will it take you to reach your $10,000 goal? = 4.57 years or 5 years

b. How large will the last deposit be? Do not round intermediate calculations. Round your answer to the nearest cent.

Future value of deposit for 4 years= $8593.99

Amount of Last deposit = Value of 10000 at year 4 - Future value of annuity

Amount of Last deposit = 10000 / (1 + 0.065*0.57) - 8593.99

Amount of Last deposit = $9643.82 - 8593.99

Amount of Last deposit = $1049.83

Amount of Last deposit = $9643.82 - 8593.99

jeff jeffy answered 1 year ago

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You need to accumulate $10,000. To do so, you plan to make deposits of $1,950 per...

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