Answer:
You need to save $210,624 at the end of each year to achieve that goal.
Explanation:
The future value of the retirement savings is $3,200,000.
We have to calculate a annuity of 10 years, with a interest rate of 9%, with a annual deposit that reaches this future value.
We use the formula for the future value of a annuity to calculate P (the annual deposit), with FV=3,200,000, n=10 and r=0.09.
[tex]FV=P\frac{(1+r)^n-1}{r} \\\\P=FV\frac{r}{(1+r)^n-1}\\\\P=3,200,000 *(\frac{0.09}{1.09^{10}-1})=3,200,000*\frac{0.09}{2.37-1}=3,200,000*\frac{0.09}{1.37} \\\\P=3,200,000*0.06582\\\\P= 210,624[/tex]
You need to save $210,624 at the end of each year to achieve that goal.
Answer:
$291,200
Explanation:
Amount intended to retire with = $3,200,000
Average interest amount if average interest rate for 10years of work is 9% since I have 10years of work life = 9% of $3,200,000
= $288,000
Total amount generated after 10years without interest = initial amount intended - interest
= $3,200,000-$288,000
= $2,912,000
Amount needed to save at the end of each year will be;
Total amount generated after 10years without interest/total number of years
= $2,912,000/10
= $291,200
