Use of Financial Calculator TI BA II Plus required. You want to save $400 000 to supplement your pension income to retire early at age 60. You have 26 years to accomplish this. Quite knowledgeable about investments, you anticipate an eight percent return. How much should you set aside each month to reach this goal?

Question

Quizplus · Accepted Answer

Using the financial calculator TI BA II Plus, input the following:
- N (number of periods): 26 years x 12 months/year = 312 
- I/Y (interest rate per period): 8%/12 months = 0.67%
- FV (future value): $400,000 
- PMT (monthly payment): unknown, to be solved for 
- PV (present value): 0

Then solve for PMT, which is the amount to be saved each month. The answer is $384. Therefore, the best choice is B).

Use of Financial Calculator TI BA II Plus Required