Research: M. Fields, Inc. is embarking on a financial journey to accumulate $1 million within a span of 10 years. The objective is to gather this amount to pay off a loan at the end of the specified period. With an annual interest rate of 12%, the company needs to carefully plan its annual deposits to achieve the desired goal.
To calculate the necessary annual deposit, we need to consider the compound interest formula:
A = P(1 + r/n)^(nt) Where: A = Final amount ($1 million) P = Initial deposit (to be determined) r = Annual interest rate (12%) n = Number of times interest is compounded per year t = Number of years (10) Since the question specifies that the deposit will be made at the end of each year, n = 1.