Question

Starling wants to retire with $2,010,000 in his retirement account exactly 31 years from today. He will make annual deposits at the end of each year to fund his retirement account. If he can earn 9.33 percent per year, how much must he deposit each year?

Answer 1

Future value (FV) = $2,010,000

Number of years (n) = 30 years

Rate of Interest (R) = 9.33% per annum

Let the Annual Deposits be $ "D". The following equation can be formed-

D = $ 12,768.44 or $12,600.88 (approx)

NOTE: I have taken "n" to be 30 years because the deposit will begin from the end of first year.

Amount to be deposited per annum to receive $2,010,000 after 31 years = $12,600.88