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At an interest rate of 7%, you can have approximately $18,000 twelve (12) years from now by depositing $___________ every year for the next twelve years assuming the deposits take place at the end of each year.

Respuesta :

Answer:

The correct answer is $1,006.24.

Explanation:

According to the scenario, the given data are as follows:

Rate of interest (r) = 7%

Future value = $18,000

Time (t) = 12 years

So, We can calculate the payment to deposit by using following formula:

FV = Pmt ((( 1 + r)^t  - 1) ÷ r )

$18,000 = Pmt ((( 1 + 0.07)^12  - 1) ÷ 0.07)

Pmt = $1,006.24

Hence, the amount that should be deposited every year is $1,006.24.

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