Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. suppose you want to have 700,000 for retirement in

suppose you want to have 700,000 for retirement in 35 years. your account earns 9% interest. a...

Free

90.2K

Verified Solution

Question

Finance

suppose you want to have 700,000 for retirement in 35 years. youraccount earns 9% interest.

a how much would you need to deposit in the account eachmonth?

b how much interest will you earn

Answer & Explanation Solved by verified expert
4.2 Ratings (847 Votes)

a.            237.95
Working:
Future value of annuity of 1 = (((1+i)^n)-1)/i Where,
= (((1+0.0075)^420)-1)/0.0075 i 9%/12 = 0.0075
= 2941.784474 n 35*12 = 420
Monthly deposit = Future value of monthly deposit / Future value of annuity of 1
=                7,00,000 / 2941.784
=                   237.95
b. 6,00,060.66
Interest earned = Future value of deposits - Amount deposited
=                7,00,000 -        237.95 * 420
=                7,00,000 - 99,939.34
=          6,00,060.66

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

suppose you want to have 700,000 for retirement in 35 years. youraccount earns 9% interest.a how much would you need to deposit in the account eachmonth?b how much interest will you earn

Other questions asked by students

Q

need to know both a and b A. discuss the embryonic development of the heart (be...

Medical Sciences
Q

The authors of a paper concerned about racial stereotypes in television counted the number of times...

Basic Math
Q

1. Predict which investment will require a greater percent value to be invested. Explain your...

Basic Math
Q

APPLICANCE WARRANTY-THE WARRANTY ON THE MOTOR OF A DISHWASHER IS8 YEARS. IF THE BREAKDOWN TIMES...

Basic Math
Q

599e Bay 3 71 dy Y

Calculus
Q

Hamilton Circuits Paths Which of the below is the only one that CANNOT be created...

Algebra
Q

1 3 ems by substitution Solve each system by substitution 1 2x 7y 1 7x...

Algebra
Q

1. Explain how businesses use the Internet to improve purchasing, logistics, and other business process...

Accounting
Q

Roy purchased a Remington bronze sculpture for 35,000 seven years ago when it was worth...

Accounting
Q

A Moving to the next question prevents changes to this answer. te Question 11 Which...

Accounting
Q

Calculate ABC Company's net income for July.

Accounting
Q

Sambulea, Inc. needs to borrow C$10 million or the foreign currency equivalent for 5 years....

Finance