How much money must you pay into an account at the beginning of each of 30 years in order to have $10 000 at the end of the 30th year? Assume that the account pays 11% per annum, and round to the nearest $1.

Question

Quizplus · Accepted Answer

Using the formula for future value of an annuity:
FV = PMT * [(1 + r)^n - 1]/r
where FV is the future value, PMT is the payment made at the beginning of each period, r is the interest rate per period, and n is the total number of periods.

Plugging in the given values, we get:
$10,000 = PMT * [(1 + 0.11)^30 - 1]/0.11

Solving for PMT, we get:
PMT = $45.01

Rounding to the nearest dollar, the answer is $45.

How Much Money Must You Pay into an Account at the Beginning