You want to have $4 million in real dollars in an account when you retire in 40

Question

You want to have $4 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 12 percent and the inflation rate is 2.5 percent. What real amount must you deposit each year to achieve your goal? (Do not round your intermediate calculations.)

A) $11,015.64

B) $5,214.5

C)$11,566.42

D)$11,456.27

E) $10,464.86

You want to have $4 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 12 percent and the inflation rate is 2.5 percent. What real amount must you deposit each year to achieve your goal? (Do not round your intermediate calculations.)

A) $11,015.64

B) $5,214.5

C)$11,566.42

D)$11,456.27

E) $10,464.86

Explanation / Answer

target future value is $4million

no of years=40, nominal rate of return =12% and inflation rate=2.5%

real amount deposit each year=$11.566.42

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