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This problem involves calculating the annual payment required for an ordinary annuity, where Ivanna invests at 4.8% interest, compounded annually, to reach a future value of $7,000 after 6 years.

We use the formula for the future value of an ordinary annuity:

\[
FV = P \times \frac{(1 + r)^n - 1}{r}
\]

Where:
- $ FV $ is the future value ($7,000),
- $ P $ is the annual payment (what we are solving for),
- $ r $ is the interest rate per period (4.8% or 0.048),
- $ n $ is the number of periods (6 years).

Rearranging the formula to solve for $ P $:

\[
P = \frac{FV}{\frac{(1 + r)^n - 1}{r}}
\]

Let's calculate this step by step to find the amount Ivanna needs to pay annually.Ivanna will need to pay approximately $1,034.31 into the annuity at the end of each year to reach a total value of $7,000 after 6 years.

Would you like more details or further clarification? Here are some related questions for further exploration:

1. How would the annual payment change if the interest rate increased to 6%?
2. What happens if the payments are made at the beginning of each year (annuity due)?
3. How would the calculation differ if the compounding were monthly instead of annually?
4. What is the formula for the present value of an ordinary annuity?
5. How would the total amount saved differ if the investment period were extended to 10 years?

**Tip:** Always double-check whether payments are made at the beginning or end of the period when working with annuities.

Ivanna wants to save money to buy a motorcycle. She invests in an ordinary annuity that earns 4.8% interest, compounded annually. Payments will be made at the end of each year. How much money will she need to pay into the annuity each year for the annuity to have a total value of $7000 after 6 years?

Learn how to calculate the annual payment required for an ordinary annuity earning 4.8% interest compounded annually to reach a future value of $7,000 after 6 years. This problem involves applying the future value of annuity formula and solving for the payment (P). Suitable for high school and college students.

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