Mr.Hopper expects to retire in 30 years,and he wishes to accumulate $1,000,000 in his retirement fund by that time.If the interest rate is 12% per year,how much should Mr.Hopper put into his retirement fund at the end of each year in order to achieve this goal?
A)$4,143.66
B)$8,287.32
C)$4,000.00

Question

Quizplus · Accepted Answer

To find the annual payment, we use the future value of an annuity formula: FV = Pmt * [(1 + r)^n - 1] / r. Solving for Pmt, we get Pmt = FV / [(1 + r)^n - 1] / r. Plugging in FV = $1,000,000, r = 0.12, and n = 30, we find Pmt ≈ $4,143.66.

MrHopper Expects to Retire in 30 Years,and He Wishes to Accumulate