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nlexa [21]
3 years ago
12

You want to be a millionaire when you retire in 35 years. a. How much do you have to save each month if you can earn an annual r

eturn of 11.8 percent
Business
1 answer:
expeople1 [14]3 years ago
7 0

Answer:

Monthly deposit= $164.24

Explanation:

Giving the following information:

Future value= $1,000,000

Interest rate= 0.118/12= 0.00983

Number of periods= 35*12= 420 months

<u>To calculate the monthly deposit, we need to use the following formula:</u>

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (1,000,000*0.00983) / [(1.00983^420) - 1]

A= $164.24

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