1 answer

I know the answer is D, but I am unsure the steps how to solve. Thanks!...

Question:

History Bookmarks People Tab Window Help Wee x B Exam 1 Answer Key - SIX SKM_80819092614180 X Q Fin 221 Flashcards | Qul x C

I know the answer is D, but I am unsure the steps how to solve. Thanks!
History Bookmarks People Tab Window Help Wee x B Exam 1 Answer Key - SIX SKM_80819092614180 X Q Fin 221 Flashcards | Qul x C Get Homework Help W X graceprendergast/Desktop/Fa19%20Fin221ex1A.pdf Illinois Mail Self Service Sapling Learning zy 2.1. Programming. compass I SYLLABUS_B: we. P Piazza ID: A 37. You are planning for your retirement and want to have $1,500,000 by the time you retire 45 years from today. You also want to have $250,000 in 20 years to help fund your children's college education. What annual end of the year deposit would you have to make for 45 years into an account paying 8% compounded annually to meet your future goals? A) $4,528 B) $3,881 C) $6,906 D) $8,311 18 You think it would he really neat to walk out on the field at half time of an Illinois home football game to

Answers

rate positively ..

this is two step problem. First we have to compute the future value of 250000 at 45th year (means 25 year of maturity)
Put in calculator
PV -250000
PMT 0
I 8%
N 25
Compute FV $1,712,118.80
Now, total future value required = 1712118.80+1500000
Total future value= $3,212,118.80
We can compute the annual payment with required future value as computed above.
Put in calculator
FV $3,212,118.80
PV 0
I 0.08
N 45
compute PMT ($8,310.67)
ans is option A)               8,311
.

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