Problem

What payment, made at the end of each year for 9 years, will accumulate to $\$ 13,800$ at $6 \%$ compounded monthly?
The required annual payment is $\$$
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Answer

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Answer

Rounding to the nearest cent gives the final answer: \(\boxed{96.68}\)

Steps

Step 1 :Given that the future value (FV) is $13,800, the annual interest rate (r) is 6% or 0.06 in decimal form, the number of compounding periods per year (n) is 12 (since it's compounded monthly), and the number of years (t) is 9.

Step 2 :The formula for the payment of an annuity when the future value is known is: \(P = \frac{FV \times (r/n)}{(1 + r/n)^{nt} - 1}\)

Step 3 :Substitute the given values into the formula: \(P = \frac{13800 \times (0.06/12)}{(1 + 0.06/12)^{12 \times 9} - 1}\)

Step 4 :Solving the equation gives: \(P = 96.67934490677582\)

Step 5 :Rounding to the nearest cent gives the final answer: \(\boxed{96.68}\)

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