Question

​(Compounding using a calculator​) Lisa Simpson wants to have ​$1.7 million in 35 years by making...

​(Compounding

using a

calculator​)

Lisa Simpson wants to have

​$1.7

million in

35

years by making equal annual​ end-of-the-year deposits into a​ tax-deferred account paying

6.75

percent annually. What must​ Lisa's annual deposit​ be?

The amount of​ Lisa's annual deposit must be

​$nothing .

​(Round to the nearest​ cent.)

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Homework Answers

Answer #1
Annual end of year deposit = Future Value of cash flows / Future Value of annuity of 1
= $       17,00,000 / 130.923
= $       12,984.73
Working;
Future Value of annuity of 1 = (((1+i)^n)-1)/i Where,
= (((1+0.0675)^35)-1)/0.0675 i 6.75%
= 130.9229675 n 35
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