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Step 1 of 2
To calculate the required annual deposit A, we can use the formula for
the future value of an annuity.
Future Value =
Where:
A = Annual Deposit
r = Interest Rate per period
n = Number of periods
Explanation
In this case, the interest rate is 10% per year, compounded annually. The
number of periods is 18 (from the 2nd birthday to the 19th birthday).
Step 2 of 2
Using the formula, we can set up the equation:
Now we can solve for A:
A=548.26
Final Answer
Therefore, the required annual deposit A is approximately $548.26
