Naomi is a 20-year old college student with an assignment to write out her plans for retirement. She is investigating several ways she can accumulate $1 million by the time she is 50 years old. She is considering a long-term certificate of deposit (CD) that pays

2

%

annually and an annuity that returns

3

%

annually. She also did research and found that the average long-term return from stock market investments is between

9

%

and

11

%.

Answer parts 1 through 5 to help her calculate how much money she will need to deposit each year to accumulate $1 million.

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Click the icon to view the $1.00 Sinking Funds Payments table.

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Click the icon to view the Future Value of $1.00 Ordinary Annuity table.

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Click the icon to view the Compound Interest of $1.00 table.

1. Calculate the amount Naomi will need to deposit each year into the CD at

2

%

for 30 years to accumulate $1 million.

The deposit for the CD each year will be

$nothing

.

(Round to nearest cent as needed.)