To pay for your? child's education, you wish to have accumulated $14,000 at the end of 10 years

Finance Oct 10, 2020

To pay for your? child's education, you wish to have accumulated $14,000 at the end of 10 years. To do? this, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 14 percent compounded? annually, how much must you deposit each year to obtain your? goal?

Expert Solution

We can calculate the annual deposit by using the following formula in excel:-

=pmt(rate,nper,pv,-fv)

Here,

Pmt = Annual deposit

Rate = 14%

Nper = 10 periods

PV = $0

FV = $14,000

Substituting the values in formula:

= pmt(14%,10,0,-14000)

= $723.99

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