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Mary and Joe would like to save up $10,000 by the end of 3 years from now to buy new furniture for their home. They currently have $1,500. in a saving account set aside for the furniture. They would lide to make 3 equal year end deposit to this savings account to pay for the furniture when they purchase it three years from now assuming that this account pay 6% interest how much should the year end payment be.
Do in 2 steps
Step 1 Future Value of a lump sum-equation A-1
Step 2 Future Value of an ordinary annuity (Solve the PMT-also known as A) rearrange A-2
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