You are saving for retirement.To live comfortably,you decide that you will need $2.5 million dollars by the time you are 65.Today is your 30th birthday,and you decide that,starting today,on every birthday up to and including your 65th birthday you will deposit the same amount into your savings account.Assuming the interest rate is 5%,the amount that you must set aside each and every year on your birthday is closest to:
A) $71,430
B) $27,680
C) $26,100
D) $26,260

Question

Quizplus · Accepted Answer

C) PV (age 29) = 2,500,000 / (1.05)³⁶ = 431,643.54 PV = 431,643.54 FV = 0 I = 5 N = 36 Compute PMT = $26,086

You Are Saving for Retirement