Marie is putting together a retirement plan and is scheduled to retire in 40 years. She is...
Question:
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?
Saving for Retirement:
A common way of saving for retirement is through monthly contributions of equal amount to an retirement saving account, such as 401(K) or IRA. The stream of contributions to the account represents an annuity, and the future value of the annuity determines the amount of funds available at retirement.
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View this answerThe monthly investment is $407.11.
In this question, the monthly investments represent an annuity, and the future value of the annuity is to be...
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How to Find the Value of an Annuity
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Chapter 21 / Lesson 15
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An annuity is a type of savings account that pays back the investor in the future. Learn the formula used to calculate an annuity's value, and understand the importance of labeling specific numbers to calculate an output over time.
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