(b) hris Hitchcock is 36 years old today and he wishes to accumulate $538,000 by

Question

(b) hris Hitchcock is 36 years old today and he wishes to accumulate $538,000 by is 59th birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his 36th through his 58th birthdays. Whä annual deposit must Chris make if the fund will earn 10% interest compounded annually? Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Annual deposit $ Click if you would like to Show Work for this question: Open Show Work Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER The parts of this question must be completed in order. This part will be available when you complete the part above

Explanation / Answer

Life of plan = 23 Years (36th to 58th birtday) Annual Deposit = Future Value / Future Value of annuity due of 1 for 23 periods at 10% = $       5,38,000 / 87.49733 = $             6,149 Working: Future Value of Annuity due of 1 = ((((1+i)^n)-1)/i)*(1+i) Where, = ((((1+0.10)^23)-1)/0.10)*(1+0.10) i 10% = 87.49733 n 23

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