How much must you invest each month in a mutual fund yielding 12.6% compounded monthly to...
How much must you invest each month in a mutual fund yielding 12.6% compounded monthly to become a millionaire in 10 years? (Round your answer to the nearest cent.) $
Homework Answers
Desired Sum = $1,000,000
Annual Interest Rate = 12.60%
Monthly Interest Rate = 1.05%
Period = 10 years or 120 months
Monthly Deposit * FVIFA(1.05%, 120) = $1,000,000
Monthly Deposit * (1.0105^120 - 1) / 0.0105 = $1,000,000
Monthly Deposit * 238.31797 = $1,000,000
Monthly Deposit = $4,196.07
So, monthly deposit is $4,196.07
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