Question

You need $24,056 at the end of 6 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year. Use Appendix B and Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods.





a.


What single payment could be made at the beginning of the first year to achieve this objective? (Do not round intermediate calculations. Round your final answer to 2 decimal places. )





Single payment made $




b.


What amount could you pay at the end of each year annually for 6 years to achieve this same objective?(Do not round intermediate calculations. Round your final answer to 2 decimal places. )

Answer 1

A. The single payment that would be made is given as $15160.07

B. The amount that would be paid annually at the end of the year is $3279.2

How to solve for the single payment

We have the following data to solve the problem with

future value = 24056

The number of years n = 6 years

The rate is r = 8 percent

The present value is the single payment that would be made

This is given by

$fv(1 + r)^n$

$24056(1 + 0.08)^6$

= 24,056 / 1.5868

= $15160.07

b. We are to find the future value of annuity

The future value of annuity has been solved through the use of the excel statistical tool

= $3279.2

Read more on annuity and present value here: https://brainly.com/question/25792915

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