Answer:
$3512.82
Explanation:
You want the value of the annual payment to an ordinary annuity earning 4.8% compounded annually, if the value after 18 years is $97,000.
Payment
The relationship between the payment P and the annuity value A is given by ...
A = P((1 +r)^t -1)/r . . . . . annual interest rate r for t years
Using the values in the problem statement, and solving for P, we have ...
P = Ar/((1 +r)^t -1)
P = $97000·0.048/(1.048^18 -1) ≈ $3512.82
Christine needs to pay in $3512.82 each year.
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