Lisa Simpson wants to have $1,100,000 in 55 years by making equal annual end-of-the-year deposits into...

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Lisa Simpson wants to have $1,100,000 in 55 years by making equal annual end-of-the-year deposits into...

Lisa Simpson wants to have $1,100,000 in 55 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 8.50 percent annually. What must Lisa's annual deposit be?

The amount of Lisa's annual deposit must be $_____.

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Answer 1

Answer #1

Future value of annuity=Annuity[(1+rate)^time period-1]/rate

1,100,000=Annuity[(1.085)^55-1]/0.085

1,100,000=Annuity*1033.476866

Annuity=1,100,000/1033.476866

=$1064.37(Approx).

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Answer 2

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