Answer:
Monthly savings= $3,584.42
Explanation:
Giving the following information:
Ross has decided that he wants to build enough retirement wealth that, if invested at 6 percent per year, will provide him with $4,600 of monthly income for 30 years. To date, he has saved nothing, but he still has 20 years until he retires.
First, we need to find the final value.
FV= (4,600*12)*30= $1,656,000
Now, we can calculate the monthly deposit:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
i= 0.06/12= 0.005
n= 20*12= 240
A= (1,656,000*0.005)/[(1.005^240)-1]= 8,280/ 2.31= $3,584.42
