question archive Carl would like to save $100,000 by s 40th birthday to pay for a special midlife crisis vacation
Carl would like to save $100,000 by s 40th birthday to pay for a special midlife crisis vacation
Subject:FinancePrice:2.84 Bought6
Carl would like to save $100,000 by s 40th birthday to pay for a special midlife crisis vacation. He plan to achieve this by investing equal annual amounts each year beginning on his 24th birthday and ending including a payment on his 40th birthday. If the investment pays an 11 percent interest rate, what is the size of each annual payment Carl needs to invest?
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size of each annual payment = $2247.15.
Step-by-step explanation
24th birthday to 40th birthday
no. of annual payments is 17
Interest rate is 11%
FV = P *{ (1+r)^n - 1 } / r
100000 = P *((1+0.11)^17 - 1)/0.11
100000 = P *44.50084281
P = 100000 /44.50084281
P =2247.15
FV- future value
