Lisa Simpson wants to have $1.9 million in 35 years by making equal annual end-of-the-year deposits...

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Lisa Simpson wants to have $1.9 million in 35 years by making equal annual end-of-the-year deposits...

Lisa Simpson wants to have $1.9 million in 35 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 9.25 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

FV_{Ordinary Annuity} = C*(((1 + i )^n -1)/i)

C = Cash flow per period

i = interest rate

n = number of payments

1900000= Cash Flow*(((1+ 9.25/100)^35-1)/(9.25/100))

Cash Flow = 8322.19

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Answer 2

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Lisa Simpson wants to have $1.9 million in 35 years by making equal annual end-of-the-year deposits...

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