document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=205252>Question 205252</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Carolyn Ellis is setting up an annuity for her retirement.  She can set aside $2000 at the end of each year for the next 20 years and it will earn 6% annual interest.  What lump sum will she need to set aside today at 6% annual interest to have the same retirement fund available 20 years from now?  How much more will Carolyn need to invest in periodic payments than she will if she makes a lump sum payment if she intends to accumulate the same retirement balance? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #155003 by </B><A HREF=/tutors/aboutme.mpl?userid=rfer><B>rfer(16322)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=rfer><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=155003\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> FV=Pmt((1+r)^n-1/r)<BR>\n" );
document.write( "FV=2000((1+.06)^20-1/.06)<BR>\n" );
document.write( "FV=$73566.67<BR>\n" );
document.write( "--------------------<BR>\n" );
document.write( "P=FV/(1+r)n<BR>\n" );
document.write( "P=73566.67/(1+.06)^20<BR>\n" );
document.write( "P=$22940.00<BR>\n" );
document.write( "---------------------<BR>\n" );
document.write( "40000-22940=$17060.00 more with payments. </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );