Question 1183116: A newscaster earns $32,200 and wants to invest 10% of his/her monthly salary to save for retirement in 24 years. If he/she invests this money at 5.9% compounded monthly, how much money will he/she have at retirement? A. How much will be saved each year? B. What will be the monthly deposit? C. What will be the amount in the account after 24 years?
Found 2 solutions by ikleyn, Theo:
Answer by ikleyn(52781)   (Show Source):
Answer by Theo(13342)  (Show Source):
You can put this solution on YOUR website! use the calculator found at https://arachnoid.com/finance/index.html to help solve this.
the results from using this calculator are:
future value = 169,532.06.
inputs were:
present value = 0
future value = 0
number of periods = 24 years * 12 months per year = 288 months.
payment = 32,200 / 12 * .10 = -268.33333333
interest rate per period was 5.9% per year / 12 = .4916666667 per month.
payments are made at the end of each period.
here's a display of the results from using this calculator.
payment is negative because it's money going out.
future value is positive because it's money coming in.
the payment at the end of each month was calculated as 32,200 per year / 12 = 2683.33333333 salary per month * .10 = 268.33333333 payment per month.
it was entered as negative because it was money going out.
answers to your questions are:
A. How much will be saved each year?
yearly salary per year = 32,200.
divide that by 12 to get a monthly salary of 2683.33333333 per month
take 10% of that to get 268.33333333 savings per month.
multiply that by 12 to get savings of 3220 per year.
note that this is 10% of the yearly salary, as it would be, based on the calculations performed.
B. What will be the monthly deposit?
the monthly deposit is 268.33333333.
this is 10% of the monthly salary.
it is the amount of savings per month.
C. What will be the amount in the account after 24 years?
the amount in the account after 24 years is the future value of the calculations in the financial calculator, which equals $169.532.16.
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