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?
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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