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4. Juan Masipag, a self-employed individual, is opening a 8% Single Payment retirement account at a bank. His goal is to accumulate Compound Present Php

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4. Juan Masipag, a self-employed individual, is opening a 8% Single Payment retirement account at a bank. His goal is to accumulate Compound Present Php 1,000,000 in the account by the time he retires from Amount Worth Factor Factor work in 20 years time. A local bank is willing to open a N FIP P/F retirement account that pays 8% interest compounded 1.080 9259 1.166 .8573 1.260 7938 annually throughout the 20 years. Juan expects that his 1.360 .7350 1.469 .6806 annual income will increase by 6% yearly during his working 1.587 6302 1.714 5835 career. He wishes to start with a deposit at the end of year 1 1.851 5403 9 1.999 5002 (A,) and increase the deposit at a rate of 6% each year 10 2.159 .4632 11 2.332 4289 thereafter. What should be the size of his first deposit (A,)? 12 2.518 3971 13 2.720 .3677 The first deposit will occur at the end of year 1, and the 14 2.937 .3405 15 3.172 3152 subsequent deposits will be made at the end of each year. 16 3.426 2919 17 3.700 .2703 The last deposit will be made at the end of year 20. 18 3.996 .2502 19 4.316 .2317 20 4.661 .2145 ANSWER: 1+g P, = A, 1+i g#i i-g 20

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