Question

Question 9 5 pts You will deposit $150 each of the next five years (the first deposit will occur one year from today, and there will be a total of 5 equal deposits) into an account that pays a 7.3% effective annual rate. Six years from today, you wish to have exactly $1000 in the account. You would need to deposit an additional $_ _into the account six years from today to meet that goal. [Hints: Make a timeline! There are many ways to solve this problem, so you should be able to verify your answer by trying a different solution method. I recommend making sure you can solve this problem by starting it as an annuity problem.] Do not round any intermediate work. Round your final answer to 2 decimal places (ex: if your answer is 12.345678 then you should enter 12.35). Margin of error for correct answers: +/-.05.

Answer 1

rate positively ..

	First we have to compute the future value of the investment at the end of 5th year
	Computation of future value using financial calculator -
	put in caclulator
	PV		0
	PMT		-150
	I		7.30%
	N		5
	Compute FV	$867.79
	Now we have to compute the future value at the end of 6th year =
	867.79*(1+7.3%)	$931.14
	Total amount required =	1000
	Therefore additional deposit =	$68.86
	1000-931.14
	ans =			$68.86