Viviana Carroll needs to have $25,000 in five years. If she can earn 8 percent on any investment, what is the amount that she will have to invest every year at the end of each year for the next five years? (Round to the nearest dollar.)

She will have to invest $4,261.41 every year at the end of each year for the next five years.

Explanation:

Use Following formula to calculate the monthly payment required.

FV = P x [ ( ( 1 + r )^n ) - 1 ) / r ]

FV = Future Value = $25,000

R = RATE OF RETURN = 8%

N = NUMBER OF YEARS = 5 YEARS

P = Monthly Payment = ?

$25,000 = P x [ ( ( 1 + 0.08 )^5 ) - 1 ) / 0.08 ]

$25,000 = P x [ ( ( 1.08 )^5 ) - 1 ) / 0.08 ]

$25,000 = P x 5.8666

P = $25,000 / 5.8666

P = $4,261.41

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%