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Please help! Sara has just graduated from college. She has determined that to purchase a home...

Please help!

Sara has just graduated from college. She has determined that to purchase a home in 10 years she needs to accumulate $42,400 for a down payment. If Sara can earn 4% per year on her savings, what is the amount of the annual annuity payment that Sara must make at the end of each year for 10 years?

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Answer #1

Rate = 4%
Nper = 10
FV = 42400
PV = 0

Annual payment can be calculated by using the following excel formula:
=PMT(rate,nper,pv,fv)
=PMT(4%,10,0,-42400)
= $3,531.54

Annual payment = $3,531.54

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