Question
person aged 40 wishes to accumulate a fund for retirement by depositing X at the end of each year into an account paying 4% interest.
person aged 40 wishes to accumulate a fund for retirement by depositing X at the end of each year into an account paying 4% interest. At age 65, the person will use the entire account balance to purchase a fifteen-year 5% annuity-immediate with annual payments of $10,500. Find X. (Answer to nearest $10.) Hint: The accumulated value of the deposits of X per year for 25 years will be the present value of the fifteen year annuity. The first deposit of X occurs at time t = 41 and the last deposit of X will occur at time t = 65. An annuity immediate has payments at the end of each time period.
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