i need help with the above problem Your goal is to have $17,500 in your bank acc

Question

i need help with the above problem

Your goal is to have $17,500 in your bank account by the end of five years. If the interest rate remains constant at 6% and you want to make annual identical deposits, how much will you need to deposit in your account at the end of each year to reach your goal? $2,793.99 $3,725.32 $3,104.43 O $3,414.87 O If your deposits were made at the beginning of each year rather than an at the end, by how much would the amount of your deposit change if you still wanted to reach your goal by the end of five years? $175.72 $219.65 O $131.79 $237.22

Explanation / Answer

1.Future value of annuity=Annuity[(1+rate)^time period-1]/rate

17500=Annuity[(1.06)^5-1]/0.06

17500=Annuity*5.63709296

Annuity= 17500/5.63709296

=$3104.43(Approx)

2.

Future value of annuity due=(1+interest rate)*Annuity[(1+rate)^time period-1]/rate

17500=1.06*annuity[(1.06)^5-1]/0.06

17500=Annuity*5.975318538

annuity=(17500/5.975318538)

=$2928.71(Approx)

Hence change=(3104.43-2928.71)

=$175.72(Approx).

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