Respuesta :
Answer:
He needs to deposit each year $747.38
Explanation:
Giving the following information:
To help you reach a $5,000 goal in five years from now, your father offers to give you $500 now. You plan to get a part-time job and make five additional deposits, one at the end of each year for 5 years. Your first deposit will be made at the end of the first year. The money is deposited in a bank that pays 7% interest.
First, we need to calculate the final value of the first $500 that the father gave him:
FV= PV*(1+i)^n
FV= 500*(1.07)^5=
FV= 701.28
Now, we have to calculate the annual deposit required:
Difference= 5,000 - 701.28= 4,298.72
We need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (4,298.72*0.07)/[(1.07^5)-1]
A= $747.38
Your annual deposit be at the end of each year to get $5,000 at the end of 5 years is $747.38.
What is the term Deposit about?
A deposit is generally defined as the money held in a bank account. On the other hand, deposit also include the transaction include transfer of money to another account.
Given Information:
- Goal=$5,000
- Offers=$500
- Interest=7%
Firstly, we need to calculate the Final value of the first $500.
Final value= PV*(1+i)^n
Final value= 500*(1.07)^5
Final value= 701.28
Now, we have to calculate the annual deposit required:
Difference= 5,000 - 701.28= 4,298.72
Final value= {A*[(1+i)^n-1]}/i
A= annual deposit
Putting the values,
A= (FV*i)/{[(1+i)^n]-1}
A= (4,298.72*0.07)/[(1.07^5)-1]
A= $747.38
Learn more about annual deposit, refer to the link:
https://brainly.com/question/10589864
