Question
Last week, Bayonetta opened a new wealth management account at the Capital Bank of Noatun to begin saving for retirement. Today, Bayonetta deposited $135,000 into
Last week, Bayonetta opened a new wealth management account at the Capital Bank of Noatun to begin saving for retirement. Today, Bayonetta deposited $135,000 into her account. She then plans to make equal deposits into the account every month for the next 18 years (thus, Bayonetta will make a total of 216 equal deposits into her account with the first deposit to be made exactly one month from today). Exactly one month after her last deposit is made into the account, Bayonetta wants to withdraw $35,000 per month from the account for a total of 15 years (i.e., a total of 180 withdrawals). If Bayonetta believes she will earn 9.75% p.a. with monthly compounding on her account over the entire deposit and withdrawal period, what is the minimum amount that she must deposit every month during the deposit phase (i.e., for months 1 to 216) to achieve her withdrawal goal?
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