Question

Suppose that you want to buy a house 5 years from now, and you estimate that an initial down payment of $30,000 will be required at that time. To accumulate the $30,000, you wish to make equal annual end of year deposits into an account paying annual interest of 6%. What should your payments be?

Answer 1

n = 5
payment --- p
i = .06

p(1.06^5 - 1)/.06 = 30000
I get p = $5321.89