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Today, you open a new savings account and plan to begin depositing equal amounts at the...

Today, you open a new savings account and plan to begin depositing equal amounts at the beginning of each year for 5 years, including the deposit you make today. There will be only these 5 deposits and no withdrawals made to your account. Assume the interest rate you will earn is 8%. If you want your account balance to be exactly $40,000 at the end of 5 years, what must be the amount of each deposit?

Solutions

Expert Solution

rate positively ..

We have to use financial claculator to solve this
put in calculator, Set the calculator at BEGIN mode
FV 40,000
PV 0
I 8%
N 5
Compute PMT ($6,313.20)
Ans = $6,313.20

jeff jeffy answered 2 years ago
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