Simpson wishes to have 1,100,000 in 35 years by making annual end-of-the-year deposits into a tax-deferred...

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Simpson wishes to have 1,100,000 in 35 years by making annual end-of-the-year deposits into a tax-deferred...

Simpson wishes to have 1,100,000 in 35 years by making annual end-of-the-year deposits into a tax-deferred account paying 11.75% annually.
what must lisa's deposit be?

the deposit must be $___. (round to the nearest cent)

business finance

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Answer 1

Answer #1

The deposit that Lisa should make to have $ 1,100,000 in 35 years can be found using the future value of annuity equation

The equation for future value of annuity is as below

where A = The annual deposit

n = number of years

r = interest rate

The future value of the annuity is know, hence we have to calculate the end of the year annual deposit.

A = $ 2702.43

Thus the deposit must be $ 2702.43

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Answer 2

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Simpson wishes to have 1,100,000 in 35 years by making annual end-of-the-year deposits into a tax-deferred...

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