On January 15, 2008, Flynn Corp. adopted a plan to accumulate funds for environmental improvements beginning July 1, 2012, at an estimated cost of $4,000,000. Flynn plans to make four equal annual deposits in a fund that will earn interest at 10% compounded annually. The first deposit was made on July 1, 2008. Future value factors are as follows:
Flynn should make four annual deposits of
A) $711,618.
B) $782,779.
C) $862,069.
D) $1,000,000.

Question

On January 15, 2008, Flynn Corp. adopted a plan to accumulate funds for environmental improvements beginning July 1, 2012, at an estimated cost of $4,000,000. Flynn plans to make four equal annual deposits in a fund that will earn interest at 10% compounded annually. The first deposit was made on July 1, 2008. Future value factors are as follows:
 Flynn should make four annual deposits of
A) $711,618. 
B) $782,779. 
C) $862,069. 
D) $1,000,000.

Quizplus · Accepted Answer

5.11 × R = $4,000,000; R = $4,000,000 ÷ 5.11 = $782,779