Answer:
Step-by-step explanation:
This is an Annuity question. It is asking for recurring monthly payment(PMT). <em>You can use a financial calculator to solve it. I am using (Texas Instruments BA II plus)</em>
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<em>.</em>
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.
