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Juan has a goal of saving up $56282 by making biweekly (26 per year) deposits into...

Juan has a goal of saving up $56282 by making biweekly (26 per year) deposits into a savings account for the next 7 years. If the account has an annual interest rate of 1.3%, how much should each of his deposits be?
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Answer #1

We are given the future value (FV) of the annuity (A) as $56,282.

Annual Rate of interest = 1.3%, Biweekly rate = 1.3% / 26 = 0.05% or 0.0005, no. of biweeks in 7 years = 7 x 26 = 182

Future value of an ordinary annuity is computed as follows -

where, r is the periodic rate of interest and n being no. of time periods

Therefore, each biweekly deposit should be $295.46.

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