Question

John is 45 years old and wants to retire at 65. He wishes to make monthly deposits in an account paying 12% compounded monthly so when he retires he can withdraw 280 dollars a month for 30 years. How much should John deposit each month?

Answer 1

Working on it

Answer 2

thank you!!!!!

Answer 3

:)

Answer 4

Still working on it...

Answer 5

Not an easy one apparently

Answer 6

no problem!!!

Answer 7

hahah oh i know!

Answer 8

This is a future value problem, but instead of finding the future value FV, they want the payment


That formula is

\[P = \frac{iFV}{(1+i)^n-1}\]


So P=((0.12/12)*280*12*30)/((1+0.12/12)^(20*12)-1)=101.89


So he should deposit 101.89 a month (for 20 years)

Answer 9

hmmmm that one didn't work

Answer 10

How many chances do you get?

Answer 11

three

Answer 12

Okay

Answer 13

got it!

Answer 14

just curious, what did you get?

Answer 15

well the numbers changed so it changed to
John is 45 years old and wants to retire at 65. He wishes to make monthly deposits in an account paying 6% compounded monthly so when he retires he can withdraw 350 dollars a month for 30 years. How much should John deposit each month?

Answer 16

i got 126.35

Answer 17

What were your calculations?

Answer 18

hmm must have used the wrong formula...

Answer 19

v=350 {1-(1+.06/12)^-360/(.06/12)}
v=58377.07

58377.07=P(1+.005)^240-1/(.005)
P=126.35