document.write( "Question 1187349: 1. How much must you deposit at the end of each of the next 12 years in a savings account paying 10% annually in order to have $1 million saved by the end of those 12 years? \n" ); document.write( "
Algebra.Com's Answer #818362 by ikleyn(52914)\"\" \"About 
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\n" ); document.write( "How much must you deposit at the end of each of the next 12 years in a savings account paying 10% annually
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document.write( "It is a classic Ordinary Annuity saving plan. The general formula is \r\n" );
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document.write( "    FV = \"P%2A%28%28%281%2Br%29%5En-1%29%2Fr%29\",   \r\n" );
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document.write( "where  FV is the future value of the account;  P is annual payment (deposit); r is the annual percentage yield presented as a decimal; \r\n" );
document.write( "n is the number of deposits (= the number of years, in this case).\r\n" );
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document.write( "From this formula, you get for for the annual payment \r\n" );
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document.write( "    P = \"FV%2A%28r%2F%28%281%2Br%29%5En-1%29%29\".     (1)\r\n" );
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document.write( "Under the given conditions, FV = $1,000,000;  r = 0.1;  n = 12.  So, according to the formula (1), you get for the annual payment \r\n" );
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document.write( "    P = \"1000000%2A%280.1%2F%28%281%2B0.1%29%5E12-1%29%29\" = $46,763.32.\r\n" );
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document.write( "Answer.  The necessary annual deposit value is $46,763.32.\r\n" );
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document.write( "Note that of projected $1,000,000 the total, you will deposits only  10 times $46,763.32, i.e. 10*46,763.32 = 467633.2 dollars.\r\n" );
document.write( "The rest is what the account will earn/accumulate/accrue in 10 years.\r\n" );
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\n" ); document.write( "\n" ); document.write( "On Ordinary Annuity saving plans,  see the lessons\r
\n" ); document.write( "\n" ); document.write( "    - Ordinary Annuity saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( "    - Solved problems on Ordinary Annuity saving plans\r
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\n" ); document.write( "\n" ); document.write( "The lessons contain  EVERYTHING  you need to know about this subject,  in clear and compact form.\r
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\n" ); document.write( "\n" ); document.write( "When you learn from these lessons,  you will be able to do similar calculations in semi-automatic mode.\r
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