A financial advisor tells you that you can make your child a millionaire if you just...

A financial advisor tells you that you can make your child a millionaire if you just start saving early. You decide to put an equal amount each year into an investment account that earns 8.0% interest per year, starting on the day your child is born until his 39thbirthday. How much would you need to invest each year to accumulate a million for your child by the time he is 40years old? (Your last deposit will be made on his 39th birthday.)a.$3,860.16b.$3,574.22c.$3,875.12d.$4,185.13e.$3,965.33 (HOW WOULD YOU SOLVE THIS IN EXCEL USING THE PMT FUNCTION)

Expert Solution

Answer:a)3,860.16 We can use the PMT() in excel to determine the payment

The number of periods =40(0+1 to 39)

The interest rate= 8.00%

The Future value =$1,000,000

So the formula used would be =PMT(B3,B4,0,-B2)

jeff jeffy answered 1 year ago

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