Lisa Simpson wants to have ?$2,000,000 in 60 years by making equal annual? end-of-the-year deposits into a? tax-deferred account paying 9

Finance Aug 07, 2020

Lisa Simpson wants to have ?$2,000,000 in 60 years by making equal annual? end-of-the-year deposits into a? tax-deferred account paying 9.25 percent annually. What must? Lisa's annual deposit? be?

The amount of? Lisa's annual deposit must be ?$?

Expert Solution

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

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

Here,

Pmt = Annual deposits

Rate = 9.25%

Nper = 60 periods

PV = $0

FV = $$2,000,000

Substituting the values in formula:

= pmt(9.25%,60,0,-2000000)

= $920.54

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