Question

Present and future value tables of $1 at 9% are presented below.

	PV of $1	FV of $1	PVA of $1	FVAD of $1	FVA of $1
1	0.91743	1.09000	0.91743	1.0900	1.0000
2	0.84168	1.18810	1.75911	2.2781	2.0900
3	0.77218	1.29503	2.53129	3.5731	3.2781
4	0.70843	1.41158	3.23972	4.9847	4.5731
5	0.64993	1.53862	3.88965	6.5233	5.9847
6	0.59627	1.67710	4.48592	8.2004	7.5233

   
How much must be deposited at the beginning of each year to accumulate to $19,000 in six years if interest is at 9%?

Multiple Choice

• $2,317.

• $1,965.

• $2,652.

• $1,753.

Answer 1

Future value = $19,000

Time period (n) = 6 years

Interest rate (i) = 9%

Amount to be deposited at the beginning of each year = ?

Future value = Amount to be deposited at the beginning of each year x FVAD (i%, n)

19,000 = Amount to be deposited at the beginning of each year x FVAD (9%, 6)

19,000 = Amount to be deposited at the beginning of each year x 8.2004

Amount to be deposited at the beginning of each year = 19,000/8.2004

= $2,317

First option is the correct option

kindly give a positive rating if you are satisfied with the solution. Please ask if you have any query related to the question, Thanks.