Question

You just inherited $10,000. While you plan to squander some of it away, how much should you deposit in an account earning 7% interest per year if you’d like to have $10,000 in the account in 10 years?

You ust inherited $10,000 w e you plan to squander some of it away, how much should you deposit in an account ea n ng 7% interest per yoar i' you'd like to have $10,000 in the account i 10 years?

Answer 1

A= d[(1+i)^n - 1]/i

i= 7%= 0.07

n= 10

A= 10000

10000= d[(1.07^10 - 1)/0.07]

10000= 13.82*d

d= 723.78

You should deposit 723.78 per year for 10 years.