Williamsburg Nursing Home is investing in a restricted fund for a new assisted-living home that will cost $6 million. How much money do they need to invest each year to have $6 million in fifteen years? If the expected rate of return on the investment is 10%, and the hospital invests at the end of each year?

Annual deposit = $188,842.66

Explanation:

Giving the following information:

Williamsburg Nursing Home is investing in a restricted fund for a new assisted-living home that will cost $6 million.

n = 15 years

i = 10%

We need to use the following formula:

FV = {A*[ (1+i) ^n-1]}/i

A = annual deposit

Isolating A:

A = (FV*i) / {[ (1+i) ^n]-1}

A = (6,000,000*0.10) / [ (1.10^15) - 1]

A = $188,842.66