Suppose Adam wants to have $750,000 in his IRA at the end of 30 years. He decides to invest in an annuity paying 6% interest, co

Question

3 years ago

13

mpounded annually. What does he have to contribute each year to reach this goal?

1 answer:

OLga [1] · Answer 1 · 2021-12-10T08:20:11+03:00

OLga [1]3 years ago

6 0

Answer:

$9486.68

Step-by-step explanation:

The future value of a annuity formula can be used:

FV = P((1+r)^n -1)/r

750000 = P(1.06^30 -1)/0.06

P = 750000(.06)/(1.06^30 -1) = 9486.68

Adam has to contribute $9,486.68 each year to reach his goal.