Question 1181319: A newscaster earns $25,600 and wants to invest 10% of his/her monthly salary to save for retirement in 36 years. If he/she invests this money at 3.6% compounded monthly, how much money will he/she have at retirement?
Found 3 solutions by mananth, MathTherapy, greenestamps:
Answer by mananth(16946)   (Show Source):
Answer by MathTherapy(10556)  (Show Source):
You can put this solution on YOUR website!
A newscaster earns $25,600 and wants to invest 10% of his/her monthly salary to save for retirement in 36 years. If he/she invests this money at 3.6% compounded monthly, how much money will he/she have at retirement?
Correct amount at retirement (after 36 years):  , after investing 10% of monthly earnings of $25,600, or $2,560, monthly.
Answer by greenestamps(13209)  (Show Source):
You can put this solution on YOUR website!
Tutor @mananth misinterpreted the problem; her interpretation does not make sense. $2560 invested once and left sitting for 36 years will not provide for a comfortable retirement.
The correct interpretation -- $2560 deposited monthly for 36 years -- gives the answer shown by the other tutor. You can get that answer by using any of a number of online calculators, or by using the future value annuity formula:
A is the regular deposit amount
i is the (annual) interest rate
n is the number of compounding periods per year
t is the number or years
For your problem,
which works out to $2,259,255.65
That WILL provide for a comfortable retirement....
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