Angie needs to have $15,000 at the end of 6 years. How much should she deposit weekly into an
ordinary annuity if it earns 6.5% interest compounded weekly?
let her payment be p
i = .065/52 = .00125
p( (1.00125^312 - 1 )/.00125 = 15000
solve for p
You should get p = 78.68
To find out how much Angie should deposit weekly into the ordinary annuity, we can use the formula for the future value of an ordinary annuity:
FV = P * (1 + r)^n
where:
FV = Future value (the amount Angie wants to have at the end, which is $15,000)
P = Weekly deposit amount
r = Interest rate per compounding period (6.5% divided by the number of compounding periods per year, which is 52 since it's compounded weekly)
n = Number of compounding periods (6 years multiplied by 52 weeks per year)
Now, let's plug in the values into the formula:
$15,000 = P * (1 + 0.065/52)^(6 * 52)
To solve for P, we can rearrange the equation:
P = $15,000 / (1 + 0.065/52)^(6 * 52)
Calculating this equation will give us the amount Angie should deposit weekly into the annuity.