ROUND YOUR ANSWER TO THE NEAREST CENT heck My Work (No moe tri vilabl Clck here
ID: 1171696 • Letter: R
Question
ROUND YOUR ANSWER TO THE NEAREST CENT heck My Work (No moe tri vilabl Clck here bo read the ebook: Putue alues REACKINGA Six years from today you reed $10,00You plan to depoun si.500 annuaily, with the frst peyment o be made year from today, in an accoune shat parys 8% ofective annual ate Your last dep, wichwil ocuar at the and of Yeawr s e A FINANCIAL GOAL will be for less than $1.500 less is needed to reach $10,000 How large will your last payment be? Round your answer to the eec 978. Chek My WorkNe moe tres avalableExplanation / Answer
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
10000=1500(1.06)^5+1500(1.06)^4+1500(1.06)^3+1500(1.06)^2+1500(1.06)^1+x[where x=last payment]
10000=1500[(1.06)^5+(1.06)^4+(1.06)^3+(1.06)^2+(1.06)^1]+x
10000=(1500*5.975318538)+x
Hence x=(10000-8962.977806)
which is equal to
=$1037.02(Approx).
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