Suppose you want to have $800,000 for retirement in 20 years. Your account earns 5% interest. Round your answers to the nearest cent. a) How much would you need to deposit in the account each month? b) How much interest will you earn?
Added by Cynthia P.
Step 1
We can use the formula for the future value of an ordinary annuity: FV = P * [(1 + r/n)^(nt) - 1] / (r/n) where: FV = future value = $800,000 r = annual interest rate = 5% = 0.05 n = number of times the interest is compounded per year = 12 (monthly) t = number Show more…
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