Annual deposits into the savings account starting today

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Reference no: EM131300163

A retirement home in Florida costs $200,000 today. Housing prices in Florida are increasing at a rate of 4% per year. Joe wants to buy the home in 8 years when he retires. Joe has $25,000 right now in a savings account paying 8% interest per year. Joe wants to make eight equal annual deposits into the savings account starting today.

How much must each deposit be so Joe will have enough money in his savings account to buy the retirement home when he retires?

Reference no: EM131300163

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