Question

If Derek plans to deposit $14,828.00 into his retirement account on each birthday beginning with his 26th and the account earns 7.00%, how long will it take him to accumulate $2,502,509.00?

Answer format: Number: Round to: 2 decimal places.

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 73.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 73.0 when he fully retires, he will wants to have $3,423,684.00 in his retirement account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 5.00% interest rate.

Answer format: Currency: Round to: 2 decimal places.

Answer 1

Derek will start depositing $14,828 into his retirement account on each birthday beginning with his 26th.

She wants to accumulate = $2502,509

Calculating the No of years it will take him to accumulate the amount:-

Where, C= Periodic Deposits = $14,828

r = Periodic Interest rate = 7%

n= no of periods

(1.07)^n = 12.040972623

taking Log on both sides,

n*Log(1.07) = Log(12.040972623)

n*0.029383778 = 1.080661569

n = 36.78 years

So, it will take 36.78 years to accumulate the amount