Problem 6-2 (Part Level Submission) Using the appropriate interest table, provid

Question

Problem 6-2 (Part Level Submission) Using the appropriate interest table, provide the solution to each of the following four questions by computing the unknowns. Click here to view factor tables What is the amount of the payments that Tony Winslow must make at the end of each of 8 years to accumulate a fund of $98,000 by the end of the 8th year, if the fund earns 8% interest, compounded annually? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o decimal places, e.g. 458,581.) Payment at the end of each year Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Payment at the end of each year = $9,213

Here, We have to use the Future Value Ordinary Annuity formula to find out the amount payment to be made at the end of each year

Let “X” be the amount Payment to be made at the end of each year

Future Value of Annuity = P x [{(1+ r)n - 1} / r ]

$98,000 = “X” x [ { ( 1.08)8 – 1 } / 0.08 ]

$98,000 = “X” x [0.850930 / 0.08 ]

$98,000 = “X” x 10.636628

“X” = $98,000 / 10.636628

“X” = $9,213.45

“X” = $9,213 (Rounded to 0 Decimal Places)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.