Naomi Dexter is 20 years old and attends Southwest Tennessee Community College. Her Business English instructor asked her to write a report detailing her plans for retirement. Naomi decided she would investigate several ways to accumulate $1 million by the time she retires. She also thinks she would like to retire early when she is 50 years old so she can travel around the world. She is considering a long-term certificate of deposit (CD) that pays 3% annually, and an annuity that returns 6% annually. She also did a little research and learned that the average long-term return from stock market investments is between 10% and 12%. Now she needs to calculate how much money she will need to deposit each year to accumulate $1 million.

3. If Naomi invests in a stock portfolio, her returns for 10 or more years will average 10%12%. Naomi realizes that the stock market has higher returns because it is a more risky investment than a savings account or a CD. She wants her calculations to be conservative, so she decides to use 8% to calculate possible stock market earnings. How much will she need to invest annually to accumulate $1,000,000 in the stock market?