You want to have $34,000 in your savings account 12 years from now. You're prepared to make equal annual deposits in the account at the end of each year. If the account pays 7% interest, what amount must you deposit each year?

One needs to invest $1,776.35 per year.

WORKINGS:-

YEAR AMT INVEST BALANCE

1 1,776.35 1,900.69
2 3,677.04 3,934.44
3 5,710.79 6,110.54
4 7,886.89 8,438.98
5 10,215.33 10,930.40
6 12,706.75 13,596.22
7 15,372.57 16,448.65
8 18,225.00 19,500.75
9 21,277.10 22,766.50
10 24,542.85 26,260.85
11 28,037.20 29,999.80
12 31,776.15 34,000.48


Rolcam 101015.

I'm with you, ROLCAM, that 1,776.35 gets the job done, if we can assume that the initial deposit is made immediately, the second is made one year from today,. and finally the last deposit is made 11 years from today (and thus is made one year prior to the 12-year deadline). If so, you've certainly got 34,000 in the kitty 12 years from now.

I'm concerned, though, with the "at the end of each year" part of the question (emphasis mine). If Deposit #1 is made one year from today, and the final one is made 12 years from today, then it'll take annual deposits of 1,900.67 to hit the target upon the final deposit.