Question

Lisa Simpson wants to have 1,500,000 in 30 years by making equal annual​ end-of-the-year deposits into a​ tax-deferred account paying 9.50

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

Answer 1

FV of annuity
P = PMT x ((((1 + r) ^ n) - 1) / i)
Where:
P = the future value of an annuity stream	1500000
PMT = the dollar amount of each annuity payment	P
r = the effective interest rate (also known as the discount rate)	9.50%
i=nominal Interest rate	9.50%
n = the number of periods in which payments will be made	30
Future value of annuity=	PMT x ((((1 + r) ^ n) - 1) / i)
1500000=	P* ((((1 +9.5%) ^30) - 1) / 9.5%)
Annual deposit=	1500000/ ((((1 +9.5%) ^30) - 1) / 9.5%)
Annual deposit=	$        10,020.88