Ask Question
4 March, 23:42

Suppose you want to have $700,000 for retirement in 35 years. Your account earns 9% interest. How much would you need to deposit in the account each month?

+5
Answers (1)
  1. 5 March, 00:53
    0
    Answer: you should deposit $236.2 each month.

    Step-by-step explanation:

    We would apply the formula for determining future value involving deposits at constant intervals. It is expressed as

    S = R[{ (1 + r) ^n - 1) }/r][1 + r]

    Where

    S represents the future value of the investment.

    R represents the regular payments made (could be weekly, monthly)

    r = represents interest rate/number of payment intervals.

    n represents the total number of payments made.

    From the information given,

    there are 12months in a year, therefore

    r = 0.09/12 = 0.0075

    n = 12 * 35 = 420

    S = $700000

    Therefore,

    700000 = R[{ (1 + 0.0075) ^420 - 1) }/0.0075][1 + 0.0075]

    700000 = R[{ (1.0075) ^420 - 1) }/0.0075][1.0075]

    700000 = R[{ (23.06 - 1) }/0.0075][1.0075]

    700000 = R[{22.06}/0.0075][1.0075]

    700000 = R[2941.3][1.0075]

    700000 = 2963.36R

    R = 700000/2963.36

    R = 236.2
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose you want to have $700,000 for retirement in 35 years. Your account earns 9% interest. How much would you need to deposit in the ...” in 📙 Mathematics 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