Question

You would like to have $650,000 in 31 years by making regular deposits at the end of each month in an annuity that pays 5.5% compounded monthly.

The table below shows the 2005 marginal tax rates, standard deduction, and exemptions for a single person

Tax Rate Single
10% Up to $7300
15% $7301 to $29,700
25% $29,701 to $71,950
28% $71,951 to $150,150
33% $150,151 to $326,450
35% More than $326,450
Standard Deduction $5000
Exemptions (per person) $3200

Determine the deposit at the end of each month.

In order to have $650,000 in 31 years, you should