Question

You are saving for retirement. To live​ comfortably, you decide you will need to save $ 4,000,000 by the time you are 65. Today is your 20 th ​birthday, and you​ decide, starting today and continuing on every birthday up to and including your 65 th ​birthday, that you will put the same amount into a savings account. If the interest rate is 6 %​, how much must you set aside each year to make sure that you will have $ 4,000,000 in the account on your 65 th ​birthday? The amount to deposit each year is ​$ .​ (Round to the nearest​ dollar.)

Answer 1

Required deposit each year (P) FVA:(((1+r)^n-1]=r) Here, A Interest rate per annum B Number of years C|Number of payments per per annum A:C Interest rate per period (r) BxC Number of periods (n) Future value of annuity (FVA) 6.00% 46 1 6.00% 46 4,000,000 Required deposit each year (P) $ 17,659 4000000:-(((1+6%)146-1):6%)

Please rate thumbs up