How much must jack deposit at the end of each year

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A motor vehicle enthusiast, Jack Butler, has decided to provide his favourite car club with a significant sum of money in 10-years time. This sum would give the car club enough funds to buy $1 million of cars at the end-of-each year into perpetuity, commencing in 11-years time.

Jack plans to accumulate the required amount to be provided to the car club by making annual end-of-year deposits into an investment account. The rate of interest earned on all future investments by any of the parties is expected to be 6% p.a.

Required:

Problem 1: Approximately how much must Jack deposit at the end of each year to accumulate the required lump-sum amount to be given to the car club at the relevant time (round to the nearest $1 000)?:

Group of answer choices

Option 1: $1575333

Option 2: $1264466

Option 3: $736000

Option 4: $943396

Reference no: EM132741306

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