Nestor is 25 years old right now and wants to retire at age 65. He wishes to make monthly deposits in an account paying 6% compounded monthly so when he retires he can withdraw $1,000 in interest each month. How much should Nestor deposit each month?

Question

e.mccormick · Answer

This is going to involve a few formulas.  However, you have 6% monthly, so the end goal is to get 6%=1000 so the montly withdrawl is the interest.  From that you can find how much needs to be in the account.

Once you know what the goal is, you need to use the right formula for compounded interest with monthly deposits to find out what will get to that ammount.

anonymous · Answer

Thank you... but where do I start?

e.mccormick · Answer

With finding out how much makes 6%=1000.  You need that first as a goal.

anonymous · Answer

like what is 6% of 1000?

e.mccormick · Answer

No.  6% of x=1000

anonymous · Answer

x=91.24?