Approximately how much should be accumulated by the beginning of retirement to provide a $2,500 monthly check that will last for 25 years, during which time the fund will earn 6% interest with monthly compounding?
A) $361,526.14
B) $388,017.16
C) $402,766.67
D)$414,008.24

Question

Quizplus · Accepted Answer

Monthly interest rate = .06/12 = .005PV = $2,500 {(1/.005) - [1/.005(1.005)^{12 × 25}]}PV = $388,017.16

Approximately How Much Should Be Accumulated by the Beginning of Retirement