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Shenli would like to plan for retirement. With the help of afinancial planner, she estimates...

Shenli would like to plan for retirement. With the help of a financial planner, she estimates that she will need $3,000,000 when she retires 30 years from now. Assume her investments produce returns of 7% per year. How much would Shenli need to save each year if she makes equal end of year deposits for the next 30 years that she works?

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Expert Solution

Information provided:

Future value (PV)= $3,000,000

Time (N)= 30 years

Interest rate (I/Y)= 7%

Enter the below in a financial calculator to compute the annual saving:

FV= 3,000,000

N= 30

I/Y= 7

Press the CPT key and PMT to compute the amount of annual saving.

The value obtained is 31,759.21.

Thereby, Shenli needs to save $31,759.21 every year.

jeff jeffy answered 2 years ago
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