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Anne Simpson wants to have $1,400,000 in 50 years by making equal annual​ end-of-the-year deposits into...

Anne Simpson wants to have $1,400,000 in 50 years by making equal annual​ end-of-the-year deposits into a​ tax-deferred account paying 11.75 percent annually. What must​ Anne's annual deposit be?

The amount of​ Anne's annual deposit must be $__ Round to the nearest cent

Solutions

Expert Solution

The answer is Anne has to deposit 571.78 $ of equal deposit each year to reach 1.4 million dollars at the end of 50 years.

This is as shown below.

Term Deposit Interest rate

Accumulated Deposit
1 571.7755 11.75 638.9591213
2 1210.734621 11.75 1352.995939
3 1924.771439 11.75 2150.932083
4 2722.707583 11.75 3042.625724
5 3614.401224 11.75 4039.093368
6 4610.868868 11.75 5152.64596
7 5724.42146 11.75 6397.040982
8 6968.816482 11.75 7787.652418
9 8359.427918 11.75 9341.660699
10 9913.436199 11.75 11078.26495
11 11650.04045 11.75 13018.92021
12 13590.69571 11.75 15187.60245
13 15759.37795 11.75 17611.10486
14 18182.88036 11.75 20319.3688
15 20891.1443 11.75 23345.85376
16 23917.62926 11.75 26727.9507
17 27299.7262 11.75 30507.44402
18 31079.21952 11.75 34731.02782
19 35302.80332 11.75 39450.88271
20 40022.65821 11.75 44725.32055
21 45297.09605 11.75 50619.50483
22 51191.28033 11.75 57206.25577
23 57778.03127 11.75 64566.94995
24 65138.72545 11.75 72792.52569
25 73364.30119 11.75 81984.60658
26 82556.38208 11.75 92256.75697
27 92828.53247 11.75 103735.885
28 104307.6605 11.75 116563.8106
29 117135.5861 11.75 130899.0175
30 131470.793 11.75 146918.6112
31 147490.3867 11.75 164820.5071
32 165392.2826 11.75 184825.8758
33 185397.6513 11.75 207181.8754
34 207753.6509 11.75 232164.7049
35 232736.4804 11.75 260083.0168
36 260654.7923 11.75 291281.7304
37 291853.5059 11.75 326146.2928
38 326718.0683 11.75 365107.4414
39 365679.2169 11.75 408646.5248
40 409218.3003 11.75 457301.4506
41 457873.2261 11.75 511673.3302
42 512245.1057 11.75 572433.9056
43 573005.6811 11.75 640333.8487
44 640905.6242 11.75 716212.035
45 716783.8105 11.75 801005.9082
46 801577.6837 11.75 895763.0616
47 896334.8371 11.75 1001654.18
48 1002225.956 11.75 1119987.506
49 1120559.281 11.75 1252224.997
50 1252796.772 11.75 1400000.393

jeff jeffy answered 1 year ago
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