Suppose that you’d like to retire in 40 years and you want to have a future value of $ 900000 in a savings account. Also suppose that your employer makes regular monthly payments into your retirement account. If you can expect an APR of 6% for your account, how much do you need your employer to deposit each month? The formulas we have been using assume that the interest rate is constant over the period in question. Over a period of 40 years, though, interest rates can vary widely. To see what difference the interest rate can make, let’s assume a constant APR of 2% for your retirement account. How much do you need your employer to deposit each month under this assumption?
Suppose that you’d like to retire in 40 years and you want to have a future value of $ 900000 in a savings account. Also suppose that your employer makes regular monthly payments into your retirement account. If you can expect an APR of 6% for your account, how much do you need your employer to deposit each month? The formulas we have been using assume that the interest rate is constant over the period in question. Over a period of 40 years, though, interest rates can vary widely. To see what difference the interest rate can make, let’s assume a constant APR of 2% for your retirement account. How much do you need your employer to deposit each month under this assumption?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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Suppose that you’d like to retire in 40 years and you want to have a
If you can expect an APR of 6% for your account, how much do you need your employer to deposit each month?
The formulas we have been using assume that the interest rate is constant over the period in question. Over a period of 40 years, though, interest rates can vary widely. To see what difference the interest rate can make, let’s assume a constant APR of 2% for your retirement account. How much do you need your employer to deposit each month under this assumption?
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