Explanation Given information: Twenty annual payments of $ 5000 each, with the first payment one year from now, are to be made from an account earning 2% per year, compounded annually. Calculation: The formula for the future value when interest is calculated annually is given by F V = C ⋅ ( ( 1 + i ) n − 1 i ) Where C is the amount deposit per period r = rate of interest t = time Therefore future value is F V = 5000 × ( 1 + 0.02 ) 20 − 1 0

6th Edition

ISBN: 9781119275565

Author: Hughes-Hallett

Publisher: WILEY

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Calculate the amount must be deposited now to cover the payments.

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APPLIED CALCULUS-PRINT COMPANION (LL)

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Calculate the amount must be deposited now to cover the payments.

Solution Summary: The author calculates the amount must be deposited now to cover the payments. Twenty annual payments of 5000 each are to be made from an account earning 2% per year, compounded annually.

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