Question

Dan would like to save $1,500,000 by the time he retires in 30 years and believes he can earn an annual return of 8%. How much does he need to invest in each of the following years to achieve his goal?

Answer 1

so he need to invest is $13241

Step-by-step explanation:

Given data

future value = $1,500,000

time t = 30 year

rate r = 8%

to find out

How much does he need to invest

solution

for find out principal we will apply here formula that is

future value = principal ( 1+ rate)^(t-1) / rate

put here all value of rate time t and future value to get principal

1500000 = principal
`(1 + .08)^(30-1)` / 0.08

principal = 1500000 / (
`(1 + .08)^(30-1)` / 0.08 )

principal = 13241.15

so he need to invest is $13241