Amount to deposit to buy a retirement home in 4 years
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The Kellys are planning for a retirement home. They estimate they will need $200,000 4 years from now to purchase this home. Assuming an interest rate of 10%, what amount must be deposited at the end of each of the 4 years to fund the home price? (Round to two decimal places.)
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Solution Summary
Using the appropriate formula, this solution illustrates how to determine the amount of periodic payments needed to be made to purchase a house in the future.
Solution Preview
The computation of the future value of an ordinary annuity is:
FVOA=PMT*((((1+i)^n)-1)/i), where
FVOA is the future value of an ...
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