Jim desires to retire in 35 years with $1,300,000. Assume a 6% annual investment rate of...

Jim desires to retire in 35 years with $1,300,000. Assume a 6% annual investment rate of return, and only $10,000 saved now. Calculate the yearly payments Jim will have to invest each year to achieve this.

Expert Solution

Rate of Return = 6% , Future Value = $1300000 , n = 35 years , Present Value = $(1300000)/(1+6%)^35 = $ 169136.78 , We already have $ 10000 saved so using the funtion in excel pmt we will solve the problem giving the above inputs PV = 159136.78 , N=35 , Rate of Interest = 6% Therefore

=PMT(6%,35,159136.8)

= $ 10976.28 yearly

jeff jeffy answered 2 years ago

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