To calculate the annual payment required to reach a future value of $50,000 in 10 years with an interest rate of 5 percent per year, you can use the future value of an ordinary annuity formula:
FV = Pmt * [(1 + r)^n - 1] / r
Where:
FV = Future Value ($50,000)
Pmt = Annual Payment
r = Interest Rate (5% or 0.05)
n = Number of years (10)
$50,000 = Pmt * [(1 + 0.05)^10 - 1] / 0.05
$50,000 = Pmt * [1.628895 - 1] / 0.05
$50,000 = Pmt * 0.628895 / 0.05
$50,000 = Pmt * 12.5779
Pmt = $50,000 / 12.5779
Pmt = $3,975.06
Therefore, you would need to pay approximately $3,975 per year to reach a future value of $50,000 in 10 years with a 5 percent interest rate per year.
The closest option to this value is $3,975 per year.
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)%0AResponses%0A%0A$4,889 per year%0A$4,889 per year%0A%0A$3,975 per year%0A$3,975 per year%0A%0A$4,907 per year%0A$4,907 per year%0A%0A$441 per year
1 answer
1 answer