Question

You need to have $24,756 available at the end of 8 years. How much to do you have invest each year, starting at the end of this year, for 8 years to achieve this goal? 11% rate (Enter your answer as a positive number rounded to 2 decimal places.)

Answer 1

Future Value of ordinary annuity			=	Annuity * Future Value of annuity of $ 1
or,	$     24,756		=	Annuity*11.8594
or,	Annuity		=	$     24,756	/	11.8594
or,	Annuity		=	$ 2,087.45
Working:
Future Value of annuity of $ 1			=	(((1+i)^n)-1)/i		Where,
			=	(((1+0.11)^8)-1)/0.11		i	11%
			=	11.8594		n	8
Thus, each year investment is			$2,087.45
Future Value of anuity of $ 2,087.45 would become amount equivalent to $ 24,756 in 8 years.