To save for retirement, you deposit $8,592.06 at the end of every 6 months. If you...
To save for retirement, you deposit $8,592.06 at the end of every 6 months. If you make these payments for the next 44 years while you work, and the interest rate is 12.03%, how much will you have in your retirement account when you go to retire? That is, immeidately after the last payment is made
Answer =
Cash Flow =
r =
n =
Homework Answers
Balance in retirement account when go to retire will be $ 2,42,45,686.18
| Future value of cash flow | = | Semi annual cash flow | * | Future value of annuity of 1 | |||||
| = | $ 8,592.06 | * | 2821.871144 | ||||||
| = | $ 2,42,45,686.18 | ||||||||
| Working: | |||||||||
| Future value of annuity of 1 | = | (((1+i)^n)-1)/i | Where, | ||||||
| = | (((1+0.06015)^88)-1)/0.06015 | i | = | 12.03%/2 | = | 0.06015 | |||
| = | 2821.871144 | n | = | 44*2 | = | 88 | |||
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