SOLUTION: Suppose you want to have $400,000 for retirement in 20 years. Your account earns 4% interest.
a) How much would you need to deposit in the account each month?
b) How mu
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-> SOLUTION: Suppose you want to have $400,000 for retirement in 20 years. Your account earns 4% interest.
a) How much would you need to deposit in the account each month?
b) How mu
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Question 1188625: Suppose you want to have $400,000 for retirement in 20 years. Your account earns 4% interest.
a) How much would you need to deposit in the account each month?
It depends on whether you intend to make your first payment at the end of the first month (regular annuity) or today (annuity due).
For a regular annuity:
where is the periodic payment, is the future value, is the interest rate as a decimal fraction, is the number of payments per year, and is the number of years of the investment.
For an annuity due:
For this problem:
The amount of interest earned is:
You can do your own arithmetic
John
My calculator said it, I believe it, that settles it
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