PLEASE TELL ME HOW YOU GET THE ANSWERS...PLEASE PROVIDE FORMULAS...THANK YOU! Ho
ID: 2613447 • Letter: P
Question
PLEASE TELL ME HOW YOU GET THE ANSWERS...PLEASE PROVIDE FORMULAS...THANK YOU!
How much do you have to save each month if you can earn an annual return of 11.4 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
How much do you have to save each month if you wait 10 years before you begin your deposits? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
How much do you have to save each month if you wait 20 years before you begin your deposits? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You want to be a millionaire when you retire in 40 years.
Explanation / Answer
Future value of annuity= P×[(1+r)^n-1]÷r
1000000= P×[(1+(11.4%÷12))^(40×12)-1]÷(11.4%÷12)
Monthly deposit, P = $102.65
Wait 10 years:
1000000= P×[(1+(11.4%÷12))^(30×12)-1]÷(11.4%÷12)
Monthly deposit, P = $326.69
Wait 20 years:
1000000= P×[(1+(11.4%÷12))^(20×12)-1]÷(11.4%÷12)
Monthly deposit, P = $1,095.47
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