You anticipate that you will need $1,500,000 when you retire 30 years from now.You plan to make 30 deposits,beginning today,in a bank account that will pay 6% interest,compounded annually.You expect to receive annual raises of 4%,so you will increase the amount you deposit each year by 4%.(That is,your second deposit will be 4% greater than your first,the third will be 4% greater than the second,etc.) How much must your first deposit be if you are to meet your goal?
A)$10,216.60
B)$10,754.31
C)$11,320.33
D)$11,886.35

Question

Quizplus · Accepted Answer

The first deposit must be $11,320.33 to meet the goal of $1,500,000 in 30 years with a 6% interest rate and 4% annual increase in deposits.

You Anticipate That You Will Need $1,500,000 When You Retire