SOLUTION: A newscaster earns $26,100 and wants to invest 10% of his/her monthly salary to save for retirement in 38 years. If he/she invests this money at 5.1% compounded monthly, how much m
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Question 1204380: A newscaster earns $26,100 and wants to invest 10% of his/her monthly salary to save for retirement in 38 years. If he/she invests this money at 5.1% compounded monthly, how much money will he/she have at retirement?
How much will be saved each year?
What will be the amount in the account after 38 years?
Answer by MathLover1(20850) (Show Source): You can put this solution on YOUR website!
A newscaster earns $ => assuming this is annual salary
wants to invest % of his/her salary to save for retirement in years
If he/she invests this money at% compounded monthly, how much money will he/she have at retirement?
a) How much will be saved each year?
we first need to calculate % = of $:
Annual savings = $
Annual savings = $
So, the newscaster will save $ each year.
What will be the amount in the account after years?
To find the amount in the account after years, we will use the formula:
Where is the future value, is the deposit,is the monthly interest rate (annual interest rate divided by ), is the number of times interest is compounded per year (monthly, so ), and is the number of years.
find the monthly deposit, we need to divide the annual savings by the number of months in a year:
Monthly deposit =
Monthly deposit
so, we have:
convert % to decimal:
months
years
Now, plug the values into the formula:
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