Discuss the equal amount of funds do you have to deposit


Uncle Harry called you to let you know that he intends to sell his beautiful ski chalet in Sun Valley four years from today. You determine that if you could save $20,000 by that time, you might have a chance to buy the chalet. The earliest you could start to put aside funds is one year from today. What equal amount of funds do you have to deposit each year beginning one year from today to accumulate the $20,000? Assume any funds deposited will earn 9% interest compounded annually? I know it has to be 1.094 x the amount to be deposited today, but can someone explain why? Why 1.094?

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Accounting Basics: Discuss the equal amount of funds do you have to deposit
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