How much money should be deposited annually in a bank account for five years if you wish to withdraw $5,000 each year for three years, beginning five years after the last deposit? The interest rate is 5% per year.

First, we need to calculate the amount required five years from now. To do it, we will determine the future value of the payments and then the preset value (in 5 years).

FV= {A*[(1+i)^n-1]}/i

A= annual payment

FV= {5,000*[(1.05^3) - 1]} / 0.05

FV= $15,762.5

PV= FV/(1+i)^n

PV= 15,762.5/1.05^3

PV= $13,612.24

You need to collect $13,612.24 in five years.

A= (FV*i)/{[(1+i)^n]-1}

A= annual deposit

A= (13,612.24*0.05) / [(1.05^5) - 1]

A= $2,463.47

How much money should be deposited annually in a bank account for five years if you wish to withdraw ​$5,000 each year for three​ years, beginning five years after the last​ deposit? The interest rate is 5​% per year.

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How much money should be deposited annually in a bank account for five years if you wish to withdraw $5,000 each year for three years, beginning five years after the last deposit? The interest rate is 5% per year.