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Lisa Simpson wants to have 1,500,000 in 45 years by making equal annual end of year...

Lisa Simpson wants to have 1,500,000 in 45 years by making equal annual end of year deposits into a tax deferred account paying 6.75 percent annually what would be Lisa's annual deposits be?

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Answer #1

Given,

Future value of the deposits = 1,500,000

no of years = 45

rate of interest = 6.75% annually

lisa is making equal annual end of year deposits,so we have to calculate lisa's annual deposits,which is the present value.

Present Value = Future value/(1+Rate of interest)n

Present Value = 1,500,000 / (1+0.0675)45

                                = 1,500,000 / 18.904046

                          = 79,348.09

So the lisa's annual deposits be 79,348.09.

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