How much must be deposited at the beginning of each year in an account that pays 8%, compounded annually, so that the account will contain $36,000 at the end

How much must be deposited at the beginning of each year in an account that pays 8%, compounded annually, so that the account will contain $36,000 at the end of 10 years? (Round your answer to the nearest cent.)

 

The amount will grow by a factor 1.08 each year so you just have to solve this equation.

 

\(36000=X*1.08^{10}\)

 

The round up to the next cent.

 

Can you do that yourself ?

FV={P{[1 + R]^N - 1/ R}} * [1 + R]

 

36,000 ={P x {[1.08]^10 - 1 / 0.08}} * 1.08

36,000 ={P x 14.486562 x 1.08}

36,000 ={P x 15.645487} divide both sides by 15.645487

P = 36,000/15.645487 = $2,300.98 amount that must be deposited at the BEGINNING of each year.