You have decide to retire in 20 years and you want to have $2,000,000 e in...

You have decide to retire in 20 years and you want to have $2,000,000 e in the bank when you retire.
You currently have $50,000 k. in the bank.
The bank pays 4.00% interest compounded yearly.
How much money do you need to deposit in your bank account each year in order to meet your retirement goal?

Expert Solution

Ans:$63,484.79

Explanation:

50,000(F/P, 4%, 20) + A(F/A, 4%, 20) = 2,000,000

50,000(2.191) + A(29.778) = 2,000,000

109,550 + 29.778A = 2,000,000

29.778A = 2,000,000 - 109,550 = 1,890,450

A = 1,890,450 / 29.778 = 63,484.79

Rahul Sunny answered 2 years ago

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