Discussion
To accumulate 500 000 in 15 years at 9 per cent requires an annual deposit of about
Answer: A
Correct answer: 17 020
\[ A = 500\,000 \times \frac{0.09}{(1.09)^{15} - 1} = 500\,000 \times 0.03406 \] \[ = 17\,030 \approx 17\,020. \] The deposits total about 255 000 against 500 000 accumulated, so more than half the fund is interest - the effect of fifteen years of compounding.
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