Answer:
Annual deposit = $1,661.497
Explanation:
This investment scheme been considered is known as sinking funds.
A Sinking Fund involves saving a series of equal amount periodically invested at certain rate of interest to accumulate a target amount in the future.
The amount to be deposited periodically can be determined as follows:
A= FV/ ((1+r)^(n) - 1)/n)
A- annual deposit, FV- future value - $12,500 r- 9%, n- 6
So we can apply this formula as follows:
A = 12,500/ (1.09^(6)-1)/0.09
A = $1,661.497
