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Steve Madison needs $392,300 in 10 years. (Use the tables below.)
How much must he invest at the end of each year, at 12% interest, to meet his needs? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.)
| Investment amount | $ |
Expert Answer
Future value required = $392,300
Number of years = n = 10
Annual interest rate = r = 12%
Future value of annuity of uniform amount = Annual deposits*{(1+r-n)-1}/r
$392,300 = Annual deposits*(1.1210-1)/0.12
$392,300 = Annual deposits *17.54874
Annual deposits = $392,300/17.54874 = $22,354.89
