Answer:
Allison would need to deposit $123,950.50
Since we are talking about compounding interest we can use the Exponential Growth formula to calculate this problem. The Formula is the following
y is the total amount after a given time
a is the initial amount
r is the interest rate in decimals
t is the given time
Assuming the total amount is $1,900,000 (since there is a number missing in the question) then we would first need to calculate the daily interest rate (since we are compounding daily) and the amount of days between her first deposit and her withdraw at age 65.
0.07 / 365 = 0.00019178 daily
(65-26) * 365 = 14,235 days
Now we can plug our values into the formula and solve for the initial amount (a)
Allison would need to deposit $123,950.50 into her retirement account today to retire at 65 with $1,900,000.
Step-by-step explanation:
Hope this helps:)
