You need $25,000 to buy a car five years from now.

A. In order to buy the car, you plan to make equal payments at the end of every year into an account yielding 7% per year. What are these annual payments?

B Your rich uncle died and left you $20,000. How much of it must you put into the same account as a lump sum today to meet your goal if you don’t want to make any of the annual payments calculated in (a)?

Answer rating: 100% (QA)

To calculate the annual payment required to buy a car in five years you can use the formula for the ... View the full answer