Can Someone please Help with Business word problem????

[Doss1255]

Carolyn Ellis is setting up an annuity for her retirement. She can set aside $2,000 at the end of each year for the next 20 years and it will earn 6% annual interest.

What lump sum will she need to set aside today at 6% annual interest to have the same retirement fund available 20 years from now?

How much more will Carolyn need to invest in periodic payments than she will if she makes a lump sum payment if she intends to accumulate the same retirement balance?

 

[Deleted member 4993]

Go to the search box of this board (nice white box against blue background) and type in - annuity - and hit search.

You'll see about 145 posts regarding annuity (including yours) would come up. Study those and tell us your plan of attack.

Please show us your work, indicating exactly where you are stuck - so that we know where to begin to help you.

 

[jonah]

\(\displaystyle A = 2,000\frac{{1 - \left( {1.06} \right)^{ - 20} }}{{0.06}}\)

Let's see you do some work by "solving" for A.