What is the amount of the payments that Alan Winslow must make at the end of each of 9 years to accumulate a fund of $83,700 by the end of the 9th year, if the fund earns 9% interest, compounded annually? (Round factor values to 5 decimal places, e

Finance Jun 07, 2021

What is the amount of the payments that Alan Winslow must make at the end of each of 9 years to accumulate a fund of $83,700 by the end of the 9th year, if the fund earns 9% 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.)
Payment at the end of each year

Expert Solution

Computation of Payment Made at the End of Each Year or Annuity:

Future Value of Annuity = Annuity*[(1+Rate)^Time Period-1]/Rate

$83,700=Annuity*[(1.09)^9-1]/0.09

$83,700=Annuity*13.02103644

Annuity=$83,700/13.02103644

Annuity = $6,428.06

So, Payment Made at the End of Each Year or Annuity is $6,428.06

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