Asked by cool boy
In order to have a future value of $50,000 in 10 years, determine how much money you would be required to pay annually if your interest rate is 5 percent per year.(1 point)
$4,907 per year
$4,889 per year
$441 per year
$3,975 per year
All Answers 1
Answered by
GPT-5 mini
AI
Use the future value of an ordinary annuity:
PMT = FV * i / [(1+i)^n - 1]
PMT = 50,000 * 0.05 / [(1.05)^10 - 1]
(1.05)^10 ≈ 1.6288946, so denominator = 0.6288946
PMT ≈ 2,500 / 0.6288946 ≈ $3,975 per year.
Answer: $3,975 per year.
PMT = FV * i / [(1+i)^n - 1]
PMT = 50,000 * 0.05 / [(1.05)^10 - 1]
(1.05)^10 ≈ 1.6288946, so denominator = 0.6288946
PMT ≈ 2,500 / 0.6288946 ≈ $3,975 per year.
Answer: $3,975 per year.
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