Ask Question
7 February, 15:25

Stacey would like to have $1 million available to her at retirement. Her investments have an average annual return of 11 %. If she makes contributions of $300 per month, will she reach her goal when she retires in 30 years?

+5
Answers (1)
  1. 7 February, 16:15
    0
    She will not be able to reach her goal. She will make $841,355.92 and she is short by $158,644.08.

    Explanation:

    Monthly contribution = PMT = $300

    Number of years = 30 years

    Number of months = n = 30 x 12 = 360

    Rate of return = r = 11% yearly = 11%/12 = 0.917% = 0.00917

    Use following formula to calculate her total worth of investment after 30 years

    FV = PMT x [ (1 + r) ^n) - 1 ] / r

    FV = $300 x [ (1 + 0.00917) ^360) - 1 ] / 0.0917

    FV = $300 x [ (1 + 0.00917) ^360) - 1 ] / 0.0917

    FV = 841,355.92
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Stacey would like to have $1 million available to her at retirement. Her investments have an average annual return of 11 %. If she makes ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers