Marcus would like to save up $3 million for his retirement. He has chosen a stock index fund that has an average APR of 7.2%.  He plans to draw on the funds at 70 years old which gives him 40 years to save. (a) How much should Marcus save monthly to meet his retirement goal? (b) How much of the future value of $3 million is interest? Give the answer both in dollars and as a percentage of the total funds.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Marcus would like to save up $3 million for his retirement. He has chosen a stock index fund that has an average APR of 7.2%.  He plans to draw on the funds at 70 years old which gives him 40 years to save.

(a) How much should Marcus save monthly to meet his retirement goal?

(b) How much of the future value of $3 million is interest? Give the answer both in dollars and as a percentage of the total funds.

 

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