SOLUTION: Suppose you want to have $400,000 for retirement in 20 years. Your account earns 5% interest compounded monthly. a) How much would you need to deposit in the account each month?

Question 1193477: Suppose you want to have $400,000 for retirement in 20 years. Your account earns 5% interest compounded monthly.
a) How much would you need to deposit in the account each month?
$

b) How much interest will you earn?
$

Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
P=d(1+(r/k))^nk -1)/(r/k)
multiply through by (r/k)=0.05/12; P=400,000
1666.67=d{(1.00416667)^240-1}=d=1.7126, round at the end
d=$973.16
the 240 payments of this over 20 years are $233,558.40
the interest is the difference between that and $400,000=$166,441.60

RELATED QUESTIONS
Suppose you want to have $300,000 for retirement in 20 years. Your account earns 9%... (answered by ikleyn)

Suppose you want to have $400,000 for retirement in 20 years. Your account earns 4%... (answered by Solver92311)

Suppose you want to have $400,000 for retirement in 20 years. Your account earns 7%... (answered by Theo,ikleyn)

Suppose you want to have $400,000 for retirement in 25 years. Your account earns 10%... (answered by math_tutor2020)

Suppose you want to have $500,000 for retirement in 20 years. Your account earns 6%... (answered by ikleyn)

suppose you want to have 600,000 for retirement in 20 years your account earns 5%... (answered by Theo)

Suppose you want to have $400,000 for retirement in 30 years. Your account earns 9%... (answered by Theo)

Suppose you want to have $600,000 for retirement in 20 years. Your account earns 10%... (answered by MathLover1)

Suppose you want to have $300,000 for retirement in 20 years. Your account earns 5%... (answered by ikleyn)