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Question
Your company must make payments of $100,000 each year for 10 years, with the first payment to be made 10 years from today. To prepare for these payments, your company must make 10 equal annual deposits into an account which pays a simple interest rate of 7 percent, daily compounding (360-day year). Funds will remain in the account during both the accumulation period (the first 10 years) and the distribution period (the last 10 years), and the same interest rate will be earned throughout the entire 20 years. The first deposit will be made immediately. How large must each deposit be?
a. $47,821.11
b. $49,661.86
c. $51,234.67
d. $52,497.33
e. $53,262.39
Answer
This answer is hidden. It contains 662 characters.
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