Math

How much would have to be invested at the end of each year at 6% interest compounded annually to pay off a debt of $80,000 in 10 years?

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asked by Nick
  1. The formula for uniform partial payment P at an interest rate of r for n periods compounded at the end of each period and initial amount A is given by:
    AR^n = P(R^n -1)/(R-1)
    where R=1+r,
    so
    P=r*AR^n / (R^n-1)
    Here
    r=6% p.a.
    n=10 years
    A=$80,000
    R=1+0.06=1.06
    P=r*AR^n / (R^n-1)
    =$10869.44

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