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A bank offers a 10% interest to be compounded annually. How much should a teacher deposit if he wants to recieve 25,000 at the end of each year for 6 years?

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[tex] \frac{PMT {((1 + i)}^{n} - 1)}{i( {1 + i)}^{n} } = PV[/tex]

PV is the loan amount

PMT is yearly payment

i is the interest rate per year in decimal form

(interest rate percentage divided by 1)

n is the number of years

PMT = 25,000

i = 10% = 0.1

n = 6 years

[tex] \: \: \: PV = \frac{25,000 ((1 + 0.1)⁶ - 1)}{0.1(1 + 0.1)^{6} } [/tex]

[tex] \: \: \: PV = 108,881.52[/tex]

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