Exploring Savings Annuity Calculations

The video tutorial explains how to calculate the monthly deposit needed to reach a retirement savings goal of $200,000 in 30 years, given an 8% annual interest rate. It introduces the savings annuity formula, explains its components, and demonstrates how to substitute known values to solve for the deposit amount. The tutorial walks through the steps to isolate the deposit variable and perform the necessary calculations, concluding with the final deposit amount rounded to the nearest cent.

What is the total amount desired at retirement?

• $200,000

• $300,000

• $150,000

• $250,000

What is the annual interest rate mentioned for the retirement account?

• 10%

• 6%

• 7%

• 8%

What does 'P sub t' represent in the context of the savings annuity formula?

• The number of compounding periods

• The annual interest rate

• The total amount desired at retirement

• The periodic deposit amount

How often is the interest compounded according to the scenario?

• Annually

• Quarterly

• Monthly

• Bi-annually

What does 'n' represent in the savings annuity formula?

• Number of years until retirement

• Number of times interest is compounded per year

• Initial deposit amount

• Total number of deposits

What variable are we solving for in the formula?

• r

• P sub t

• d

• n

How many years until retirement is planned in the scenario?

• 30 years

• 25 years

• 20 years

• 35 years

What operation do we perform first to isolate 'd' in the equation?

• Multiplication

• Subtraction

• Division

• Addition

After isolating 'd', what is the next step in the calculation?

• Multiply by the interest rate

• Divide by the compounded expression

• Add the initial deposit

• Subtract the final amount

What is the final monthly deposit amount rounded to the nearest cent?

• $133.95

• $134.15

• $134.20

• $135.00