The following computation took place: $20,000 divided by the future value of a 12-year, 4% ordinary annuity What question will this computation answer? A) How much must be invested now so that equal payments can be withdrawn at the end of each year for 12 years? B) How much must be invested now so that $20,000 is accumulated by the end of the 12^th year? C) How much will be available at the end of the12th year if a payment of $20,000 is deposted now? D) How much must be deposited at the end of every year so that $20,000 is available at the end of 12 years?

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Quizplus · Accepted Answer

The computation divides $20,000 by the future value of an annuity to find the annual payment needed to accumulate $20,000 in 12 years.

The Following Computation Took Place: $20,000 Divided by the Future