Marie is putting together a retirement plan and is scheduled to retire in 40 years. She is planning to open a retirement account and invest an equal amount each month into the retirement account. If she expects to earn 10.5% per year in the account and is planning to have $3,000,000 in the account at retirement, what is the amount of the monthly investment?

R=407.11$

Explanation:

Since the Marie wants to contribute equal amount per month in order to get the $3,000,000 after 40 years, therefore the future value of annuity formula shall be applied to the given question to solve the problem.

Future value of annuity=R[ ((1+i) ^n-1) / i]

R=monthly investment to be made=?

n=number of payments involved=40*12=480

i = interest rate=10.5%/12=0.875%

Future value of annuity=$3,000,000

$3,000,000=R[ ((1+0.875%) ^480-1) / 0.875%]

R=407.11$