Question

Find the amount needed to deposit into an account today that will yield pension payments of $30,000 at the end of each of the next 29 years if the account earns interest at a rate of 6.9%/yr compounded annually. (Round your answer to the nearest cent.)

$_____

Answer 1

Amount needed to deposit today		=	Annual Cash flows * Present value of annuity of 1
		=	$           30,000	*	12.39962
		=	$ 3,71,988.53
Working:
Present value of annuity of 1			=	(1-(1+i)^-n)/i		Where,
			=	(1-(1+0.069)^-29)/0.069		i	0.069
			=	12.39962		n	29