What annual deposit is necessary to have $13,000 in 5 years if all the money is...

Question

Question

What annual deposit is necessary to have $13,000 in 5 years if all the money is deposited at 1.5% interest compounded annuall

Answer 1

Answer #1

a) ordinary annuity is the correct answer.

The ordinary annuity is the amount deposited per year in order to accumulate a certain amount of fund.

b) Future Value of Annuity = Annuity Payment * [ {( 1+ Rate of Interest)^Time - 1 } / rate of Interest ]

$ 13,000 = Annuity Payment * [ {( 1+ 1.5% )^ 5 - 1 } / 1.5%]

$ 13,000 = Annuity Payment * 5.152266926

Annuity Payment = $ 13,000 / 5.152266926

= $ 2,523.16

Hence the correct answer is $ 2,523.16

Answer 2

Similar Homework Help Questions

Classify the financial problem. Assume a 6% interest rate compounded annually. What annual deposit is necessary...

Classify the financial problem. Assume a 6% interest rate compounded annually. What annual deposit is necessary to give $10,000 in 5 years? o ordinary annuity O future value O present value O amortization O sinking fund Answer the question. (Round your answer to the nearest cent.) $
Sebastopol Movie Theater will need $180,000 in 5 years to replace the seats. What deposit should...

Sebastopol Movie Theater will need $180,000 in 5 years to replace the seats. What deposit should be made today in an account that pays 0.8% compounded semiannually? (a) State the type. O present value of an annuity O present value O sinking fund o ordinary annuity O amortization (b) Answer the question. (Round your answer to the nearest cent.)
If an apartment complex will need painting in years and the job will cost $125,000, what...

If an apartment complex will need painting in years and the job will cost $125,000, what amount needs to be deposited into an account now in order to have the necessary funds? The account pays 3% interest compounded semiannually. (a) State the type. O amortization O future value o ordinary annuity O present value O sinking fund (b) Answer the question. (Round your answer to the nearest cent.)

If an apartment complex will need painting in 3+ years and the job will cost $125,000,...

If an apartment complex will need painting in 3+ years and the job will cost $125,000, what amount needs to be deposited into an account now in order to have the necessary funds? The account pays 3% interest compounded semiannually. (a) State the type. O amortization O future value o ordinary annuity O present value O sinking fund (b) Answer the question. (Round your answer to the nearest cent.) $
What is the future value of $119,000 invested for 5 years at 8% compounded monthly? (a)...

What is the future value of $119,000 invested for 5 years at 8% compounded monthly? (a) State the type amortization future value present value ordinary annuity sinking fund (b) Answer the question. (Round your answer to the nearest cent.) $
Classify the financial problem. Assume a 10% interest rate compounded annually. Find the value of a...

Classify the financial problem. Assume a 10% interest rate compounded annually. Find the value of a $1,000 certificate in 4 years. O sinking fund O present value future value o ordinary annuity amortization Answer the question. (Round your answer to the nearest cent.)

An accounting firm agrees to purchase a computer for $170,000 (cash on delivery) and the delivery...

An accounting firm agrees to purchase a computer for $170,000 (cash on delivery) and the delivery date is in 270 days. How much do the owners need to deposit in an account paying 0.55% compounded quarterly so that they will have $170,000 in 270 days? (a) State the type. o amortization O sinking fund o ordinary annuity present value future value (b) Answer the question. (Round your answer to the nearest cent.)
16. Suppose $15,000 is invested at an annual rate of 5% for 12 years. Find the...

16. Suppose $15,000 is invested at an annual rate of 5% for 12 years. Find the compounded amount interest is compounded as follows. a.) Annually b.) Semiannually c.) Quarterly d.) Monthly 17. Find the present value of each compounded amount: a.) $42000 in 7 years, 6% compounded monthly. b) $17,650 in 4 years, 4% compounded quarterly. c.) S 1347.89 in 3 years, 5.5% compounded semiannually. 18. Find the future value of each annuity. a.) S 1288 deposited at the end...
What is the monthly payment for a home costing $425,000 with a 30% down payment and...

What is the monthly payment for a home costing $425,000 with a 30% down payment and the balance financed for 30 years at 6.5%? (a) State the type. O sinking fund o ordinary annuity O present value O future value O amortization (b) Answer the question. (Round your answer to the nearest cent.) $

You have just won $130,000 from a lottery. If you invest all this amount in a...

You have just won $130,000 from a lottery. If you invest all this amount in a tax-free money market fund earning 6% compounded weekly, how long do you have to wait to become a millionaire? (Round your answer to two decimal places.) _____yr In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the required payment for the sinking fund. (Round your answer to the...