You want to retire exactly 35 years from today with $1,930,000
in your retirement account. If you think you can earn an interest
rate of 9.99 percent compounded monthly, how much must you deposit
each month to fund your retirement?
A) $4,595.24
B) $505.45
C) $509.66
D) $543.64
E) $594.79
Information provided:
Future value= $1,930,000
Time= 35 years*12= 420 months
Interest rate= 9.99%/12= 0.8325% per month
The amount of monthly deposit is calculated by entering the below in a financial calculator:
FV= 1,930,000
N= 420
I/Y= 0.8325
Press the CPT key and PMT to compute the amount of monthly deposit.
The value obtained is 509.66.
Hence, the answer is option c.
In case of any query, kindly comment on the solution.
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