Question

You would like to purchase a townhouse and you wish to save for the down payment. What amount invested at the end of each year at 10% annually will grow to $10,000 at the end of five years

Answer 1

We know that,

Future Value = Amount *(1+rate)^(end year - current year) + Amount *(1+rate)^(end year - current year) +Amount *(1+rate)^(end year - current year) +Amount *(1+rate)^(end year - current year) + ....... Amount *(1+rate)^(0)

10000 = Amount * { (1+0.1)^(5-1) +(1+0.1)^(5-2) +(1+0.1)^(5-3) +(1+0.1)^(5-4) +(1+0.1)^(5-5) }

Amount = 1637.97 Answer