Question

Mitch opened a retirement account that has an annual yield of 4.2% compounding annually. He is planning on retiring in 13 years. How much must he deposit into that account each year so that he can have a total of $1,000,000 by the time he retires?

Answer 1

P = 4878

Explanation:

So we'll use the formula

A = p(1+r/n)^ (nt)

A = 1000000

P is the unknown

R = 4.2

N = 13

T = 13

1000000= p ( 1+ 0.42/13)^ 169

1000000 = p (1.032)^169

1000000= p 205

P = 4878