Question

You just turned 18 years old today and decided you want to accumulate $6,000,000 for retirement. You figure you can start making weekly deposits into a mutual fund that promises to pay an average yield of 12% per year. You intend to make the first deposit at the end of this week and retire exactly on the day of your 67^th birthday. How much money should you deposit weekly in the mutual fund to meet your goal?

Answer 1

Time of weekly deposits in year				=	49	(67-18)
No. of weeks of investments				=	49	x	52	=	2548
Weekly interest rate				=	12%/52	=	0.2308%
Future Value of annuity of 1				=	(((1+i)^n)-1)/i			Where,
				=	(((1+0.2308%)^2548)-1)/0.2308%			i	0.2308%
				=	1,53,670.563			n	2548
Weekly Deposit				=	Target Accumulated Amount / Future Value of annuity of 1
				=	$       60,00,000	/	1,53,670.563
				=	$ 39.04
Thus, Weekly deposit is approximate to				$    39.04