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You want to buy a car for cash 5 years from now. The car price at...

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Finance

You want to buy a car for cash 5 years from now. The car priceat that time will be 20000 dollars. To this end you want to make anannuity deposit each year so that you accumulate the requiredamount. Interest rate is 6%. How much do you have to deposit eachyear if (i) deposits are made at the end of each year (ii) depositsare made at the beginning of each year.

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The deposit to be made at the end of each year Future Value 20000 Annual Interest Rate r 6 per year Number of years n 5 Years Annual    See Answer
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Transcribed Image Text

You want to buy a car for cash 5 years from now. The car priceat that time will be 20000 dollars. To this end you want to make anannuity deposit each year so that you accumulate the requiredamount. Interest rate is 6%. How much do you have to deposit eachyear if (i) deposits are made at the end of each year (ii) depositsare made at the beginning of each year.

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