Question

You decide you want to have a million dollars in the bank when you retire. Your...

You decide you want to have a million dollars in the bank when you retire. Your bank pays 3% interest per year. If you start when you are 28, how much would you need to save each year to reach your goal by the time you are 68, assuming the interest rate stays the same?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1


Using financial calculator BA II Plus - Input details:

#

I/Y = Rate =

3.000000

FV = Future value =

-$1,000,000

N = Total payment term = 68-28 =

                          40

PV = Present value =

$0.00

CPT > PMT = Monthly Payment =

$13,262.38

Alternate method:

PMT = FV/(((1+R%)^N-1)/R%)

PMT =1000000/(((1+3%)^40-1)/3%)

PMT = $13,262.38

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2. You want to have 2 million dollars in the bank after 20 years. How much...
2. You want to have 2 million dollars in the bank after 20 years. How much money should you save a week to reach this amount, assuming you can get 8% interest a year?
Suppose you want to retire when you reach age 70, at that time you want to...
Suppose you want to retire when you reach age 70, at that time you want to have $1,000,000 accumulated in your retirement account. Now your 25 years old, starting today, how much you have to save equally, at the beginning of each year, in order to reach your retirement goal if the account earns 5% annually compounded interest?
You want to have $4.5 million in real dollars in an account when you retire in...
You want to have $4.5 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 13 percent and the inflation rate is 6.5 percent. What real amount must you deposit each year to achieve your goal?
You want to have $2 million in real dollars in an account when you retire in...
You want to have $2 million in real dollars in an account when you retire in 50 years. The nominal return on your investment is 9 percent and the inflation rate is 4 percent. What real amount must you deposit each year to achieve your goal?
You want to have $1.2 million in real dollars in an account when you retire in...
You want to have $1.2 million in real dollars in an account when you retire in 35 years. The nominal return on your investment is 8 percent and the inflation rate is 3.0 percent. What is the real amount you must deposit each year to achieve your goal?
You want to have $2 million in real dollars in an account when you retire in...
You want to have $2 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 9 percent and the inflation rate is 4 percent. What real amount must you deposit each year to achieve your goal?
1) If you retire in 40 years, you want to have $2.5 million saved. The interest...
1) If you retire in 40 years, you want to have $2.5 million saved. The interest rate is 7%. If you start saving today, how much must you save every year in order to achieve your goal? **Can you show me using excel? 2) You get a 60 month car loan for $15,000. If the interest rate quoted is 4%, but you decide to pay $750 per month instead, how much faster will you be able to pay off the...
You want to have $2 million in real dollars in an account when you retire in...
You want to have $2 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 12 percent and the inflation rate is 3.6 percent.    What real amount must you deposit each year to achieve your goal? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
1.You are 18 today want to retire at age 65.   Starting with the day of your...
1.You are 18 today want to retire at age 65.   Starting with the day of your retirement, you would like to have an annuity initially in the amount of $35,000 per year (but growing at a 3% annual rate) for 35 years.      You will inherit $30,000 from your long lost uncle when you turn 34 and save that money as part of your financial plan. Assume an interest rate of 7% for all periods? How much must you put into...
You want to have $1 million in real dollars in an account when you retire in...
You want to have $1 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 9 percent and the inflation rate is 4 percent.    What real amount must you deposit each year to achieve your goal? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)   Deposit amount $
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT