9514 1404 393
Answer:
$1,754.57
Explanation:
If you put the amount in savings at the beginning of the year, then the balance after 7 years is ...
A = P(1 +r)((1 +r)^7 -1)/r . . . . for payment P at annual rate r for 7 years
15000 = P(1.05)(1.05^7 -1)/0.05 = 8.54911P
Then the amount P that needs to be saved is ...
15000/8.54911 = P = 1754.57
You need to deposit $1,754.57 at the beginning of each year for 7 years to have a balance of $15,000 at the end of 7 years.
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If you wait until the end of the year to deposit the money, the amount will need to be 5% higher: $1,842.30.