You will need to buy a replacement computer costing 3 000 in

You will need to buy a replacement computer, costing $3 000, in five years time. If you have a bank account which earns 8% annual interest, how much must you put in the bank every year in order to have enough money for the replacement, assuming you make your first deposit in a year\'s time? $565 $597 $666 $675 $712

Solution

The amount we need to invest today is \"A\"

This amount need to grow to $3000 after 5 years

therfore this must hold

A(1.08)+A(1.08)^2+A(1.08)^3+A(1.08)^4+A(1.08)^5==A*6.33=3000

A=473.19

All optins are wrong Kindly check.