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    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 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 ...

    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.