Computing annuity payment: Trevor Smith wants to have a million dollars at retirement, which is 15 years away. He already has $200,000 in an investment account earning 8 per cent annually. How much does he need to save each year, beginning at the end of this year to reach his target? Assume he could earn 8 per cent on any investment he makes. (Round to the nearest dollar.)

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The correct answer is A. $13,464.To calculate the annuity payment, we can use the formula:PMT = (FV * r) / ((1 + r)^n - 1)where:PMT is the annuity paymentFV is the future valuer is the annual interest raten is the number of yearsIn this case, we have:FV = $1,000,000r = 8% = 0.08n = 15Plugging these values into the formula, we get:PMT = (1,000,000 * 0.08) / ((1 + 0.08)^15 - 1)PMT = $13,464.06Therefore, Trevor needs to save $13,464 each year to reach his target of $1 million at retirement.

Computing Annuity Payment: Trevor Smith Wants to Have a Million