Question

In: Finance

You begin investing in your retirement and would like to know how many years it will...

You begin investing in your retirement and would like to know how many years it will take to have 1,000,000 saved in inflation adjusted dollars. Your retirement savings currently are: $0
Assume all investments grow tax-deferred and at the same overall rate.

4,000 Invested annually
0.1000 Annual compounded gross rate of return (blended for stocks, bonds, etc.)

How many FEWER years will it take to save $1,000,000 for retirement if you adjust the following:
50000 Initial retirement savings/assets (add these to PV but be careful with signage)

Solutions

Expert Solution

1 Amount required 1000000
Present savings 0
Annual savings 4000
rate of return 10%
Time required 34.18
2 Amount required 1000000
Present savings 50000
Annual savings 4000
rate of return 10%
Time required 25.68
Number of fewer years 8.51

WORKINGS


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