Question

At age 37 you start saving for retirement if your investment plan pays an APR of 6% and you want to have $.09 million when you retire in 28 years, how much should you deposit monthly?

Answer 1

Monthly deposit= $1,036.116

Step-by-step explanation:

Giving the following information:

Future Value (FV)= $900,000

Number of periods= 28*12= 336 months

Interest rate (i)= 6% = 0.06/12= 0.005

To calculate the monthly deposit, we need to use the following formula:

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

A= monthly deposit

Isolating A:

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

A= {900,000*0.005) / [(1.005^336) - 1]

A= $1,036.116