Betsy Company estimated that at the end of seven years, it will be necessary to have $90, 000 available in a pension fund.The correct interest rate was 9%.Actuarial information for seven periods at 9% follows:
$\begin{array}{llr}
\text { Future amount of 1 } &1.8280\
\text { Future amount of ordinary annuity of 1} &9.2004\
\text { Present value of 1 } &0.5470\
\text { Present value of ordinary annuity of 1 } &5.0330\
\end{array}$
Required:
Compute the amount that the company must deposit at the end of each year in order to have the necessary funds available at the end of the seventh year.

Question

Betsy Company estimated that at the end of seven years, it will be necessary to have $90, 000 available in a pension fund.The correct interest rate was 9%.Actuarial information for seven periods at 9% follows:
 $\begin{array}{llr}
  \text { Future amount of 1 } &1.8280\
 \text {  Future amount of ordinary annuity of 1} &9.2004\
 \text { Present value of 1 } &0.5470\
 \text { Present value of ordinary annuity of 1 } &5.0330\
\end{array}$
 Required:
Compute the amount that the company must deposit at the end of each year in order to have the necessary funds available at the end of the seventh year.

Quizplus · Accepted Answer

The Answer of Betsy Company estimated that at the end of seven years, it will be necessary to have $90, 000 available in a pension fund.The correct interest rate was 9%.Actuarial information for seven periods at 9% follows:
 $\begin{array}{llr}
  \text { Future amount of 1 } &1.8280\
 \text {  Future amount of ordinary annuity of 1} &9.2004\
 \text { Present value of 1 } &0.5470\
 \text { Present value of ordinary annuity of 1 } &5.0330\
\end{array}$
 Required:
Compute the amount that the company must deposit at the end of each year in order to have the necessary funds available at the end of the seventh year.

Betsy Company Estimated That at the End of Seven Years