Question

How much must be deposited at the beginning of each year to accumulate to $16,000 in six years if interest is at 9%?

Answer 1

Amount to be deposited at the beginning of each year = ?

Time period (n) = 6 years

Interest rate (i) = 9%

Future value = $16,000

Future value = Amount to be deposited at the beginning of each year x Future value annuity due factor (i%,n)

16,000 = Amount to be deposited at the beginning of each year x Future value annuity due factor (9%,6)

16,000 = Amount to be deposited at the beginning of each year x 8.20043

Amount to be deposited at the beginning of each year = $1,951 (rounded to nearest whole dollar)