Use the following 8% interest factors for questions .
-Korman Company wishes to accumulate $300,000 by May 1, 2019 by making 8 equal annual deposits beginning May 1, 2011 to a fund paying 8% interest compounded annually.What is the required amount of each deposit?

Question

Use the following 8% interest factors for questions . 
-Korman Company wishes to accumulate $300,000 by May 1, 2019 by making 8 equal annual deposits beginning May 1, 2011 to a fund paying 8% interest compounded annually.What is the required amount of each deposit?

Quizplus · Accepted Answer

The future value of an annuity is given by the formula:FV = PMT * [(1 + r)^n - 1] / rwhere:FV is the future valuePMT is the payment amountr is the annual interest raten is the number of yearsIn this case, we have:FV = $300,000r = 8% = 0.08n = 8Substituting these values into the formula, we get:$300,000 = PMT * [(1 + 0.08)^8 - 1] / 0.08$300,000 = PMT * 9.92007PMT = $30,234Therefore, the required amount of each deposit is $30,234.

Use the Following 8% Interest Factors for Questions