Answer:
Periodic payment = $3756.85
Explanation:
Given:
Future value = $750,000
Rate (r) = 7% = 0.07
Number of year (n) = 40
Pmt = periodic payment = ?
Computation of periodic payment:
[tex]Future \ value = Pmt [\frac{(1+r)^n-1}{r} ]\\\\750,000 = Pmt [\frac{(1+0.07)^{40}-1}{0.07} ]\\\\750,000 = Pmt [\frac{(1.07)^{40}-1}{0.07} ]\\\\750,000 = Pmt [\frac{14.9744578-1}{0.07} ]\\\\750,000 = Pmt [\frac{13.9744578}{0.07} ]\\\\750,000 = Pmt [199.635111 ]\\\\\frac{750,000}{199.635111} = Pmt \\\\Pmt = 3,756.85[/tex]
Periodic payment = $3756.85
