Question

In order to have 6,000,000 in 40 years with a 5.75% rate. how much should be deposited each month?

Answer 1

Answer:

Step-by-step explanation:

This is an Annuity question. It is asking for recurring monthly payment(PMT).  You can use a financial calculator to solve it. I am using (Texas Instruments BA II plus)

Since the payments occur monthly , adjust the interest rate to monthly rate and multiply  40 years by 12 since we have 12 months in a  year.

Total duration of investment ; N = 40*12 = 480

Interest rate; I/Y = 5.75% /12 = 0.4792%

Future value; FV = 6,000,000

Present value ; PV = 0

then CPT PMT = 3,222.912

Therefore $3,222.91  should be deposited each month to achieve the goal.