Angie needs to have an annuity payment of $1,300 at the end of each year for the next 10 years. How much should she deposit now at 10% interest compounded annually, to yield this payment?

To find out how much Angie should deposit now, we can use the present value formula for an ordinary annuity. The formula is:

PV = PMT * ((1 - (1 + r)^(-n)) / r)

Where:
PV = Present Value (the amount Angie needs to deposit now)
PMT = Payment per period ($1,300)
r = Interest rate per period (10% or 0.10)
n = Number of periods (10 years)

Let's substitute the values into the formula and calculate the present value.

PV = $1,300 * ((1 - (1 + 0.10)^(-10)) / 0.10)

Simplifying further:

PV = $1,300 * ((1 - 1.1^(-10)) / 0.10)

PV = $1,300 * ((1 - 0.386971) / 0.10)

PV = $1,300 * (0.613029 / 0.10)

PV = $1,300 * 6.13029

PV ≈ $7,969.38

Therefore, Angie should deposit approximately $7,969.38 now at a 10% interest rate compounded annually to yield an annuity payment of $1,300 at the end of each year for the next 10 years.

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