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Six years from today you need $10,000. You plan to deposit $1,400 annually, with the first...

Six years from today you need $10,000. You plan to deposit $1,400 annually, with the first payment to be made a year from today, in an account that pays a 9% effective annual rate. Your last deposit, which will occur at the end of Year 6, will be for less than $1,400 if less is needed to reach $10,000. How large will your last payment be? Do not round intermediate calculations. Round your answer to the nearest cent.

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Answer #1

Ans:- we will first find the Future Value at the end of year 5 by the FV function of excel.

Rate=9%,Nper=5, Pmt=-$1,400.PV=0.

Future Value at the end of year 5 will be $8,378.59.

FV at the end of year 6 will be $8,378.59 * (1 + 0.09) = $9,132.67.

Therefore, the final payment need to make $10,000 will be ( $10,000 - $9,132.67) = $867.33.

Therefore, the last payment needed is $867.33.

Note:- If this answer helps you pls give thumbs up.

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