Company has an plan to provide a pension plan for its one employee. They plan to start saving on 12/31/2020 and will save the same amount at the end of each year for 4 years ending at 12/31/2023. Once the money is accumulated on 12/31/2023. They will place in in an investment that will earn 9% annual interest. The company will pay $6,000 at the start of year year starting 1/1/2025 and continuing 4 more years to 1/1/2029 total of 5 payments. Instead of the amount of money sets aside from the savings annuity is $25,000 at 12/31/2023. So if the amount of money the company need to save every year is $5,887 starting 12/31/2020 then what interest does this savings account earn annually. I got 4% is that correct? thank you brenda
Company has an plan to provide a pension plan for its one employee. They plan to start saving on 12/31/2020 and will save the same amount at the end of each year for 4 years ending at 12/31/2023. Once the money is accumulated on 12/31/2023. They will place in in an investment that will earn 9% annual interest. The company will pay $6,000 at the start of year year starting 1/1/2025 and continuing 4 more years to 1/1/2029 total of 5 payments.
Instead of the amount of money sets aside from the savings
I got 4% is that correct?
thank you
brenda
The question relates to finding the interest rate which the savings account is giving.
Here,
Future value of the payment (FV) = $25,000
Annual payments (PMT) = $5887
Number of years of payment (NPER) = 4
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