Roy, Who Has Just Turned 40, Would Like to Have

Multiple Choice

Roy, who has just turned 40, would like to have an annual annuity of $20,000 paid over a 20-year period, the first payment occurring on his 66th birthday. How much must Roy save each year (end of year) for the next 25 years to have this annuity, if the investment will earn 12 percent compounded annually?

A) $16,000
B) $19,046
C) $1,120
D) $944.10