How much money do you need to save each year to be a millionaire by the...

How much money do you need to save each year to be a millionaire by the time you are 65 if you can earn an interest rate of 8% and you start saving when you were born? Please use two decimals rounded up.

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Expert Solution

PV = Amount required = $1,000,0000

n = 65 years

r = interest rate = 8%

P = Annual savings

Annual savings can be calculated using the below formula

P = [r*PV] / [1 - (1+r)^-n]

= [8%*$1,000,000] / [1 - (1+8%)^-65]

= $80,000 / 0.99327865955

= $80,541.3458055

Therefore, amount required to save each year is $80,541.35

jeff jeffy answered 1 year ago

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