Amount to be saved by age of 65 = 1 million = 1000000
Rate of interest = 5%
Amount to be deposited per year from age of 33 = ?
Amount to be deposited per year will form an ordinary annuity of 33 years such that deposits begin on 33rd birthday and end on 65th birthday It can be seen that
t= 0 will be at 32nd birthday
t=1 will be at 33rd birthday
t=2 will be at 34th birthday
.
.
.
t= 32 will be at 64th birthday
t=33 will be at 65th birthday
We will find yearly deposit by using pmt function in excel
Formula to be used in excel: =pmt(rate,nper,pv,-fv)
Here pv = 0 as no initial amount available at t=0 or 32 birthday is 0
Using pmt function, we get amount to be set aside each year = 12490.04
Therefore Amount to be deposited per year = $12490 (rounded off to nearest dollar)
help asap e RenmaiRIHg: 00:3053 Submit Quiz This Question: 1 pt 6 of 12 This Quiz:...
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