You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year.
a. What single payment could be made at the beginning of the first year to achieve this objective?
b. What amount could you pay at the end of each year annually for 10 years to achieve this same objective?

Home work, tell us what you think and how you got there, and we can help you with it, no one is going to give you homework answers.

We teach you to fish, not hand out free fish.

** by the way 8 percent is not a realistic CD rate that was the first big give away.

Quote:

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Originally Posted by munaidu

You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year.
a. What single payment could be made at the beginning of the first year to achieve this objective?
b. What amount could you pay at the end of each year annually for 10 years to achieve this same objective?

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Here is what I attempted. Please validate.

Future Value 28974
Rate 8%
Period 10
Single Payment Present Value 13421
Annual payment each year for 10 years 6216