Question
You want to accumulate $2 millions by your retirement date, which is 25 years from now. You will make 25 deposits in your bank, with
You want to accumulate $2 millions by your retirement date, which is 25 years from now. You will make 25 deposits in your bank, with the first occurring today. The bank pays 8.6% interest, compounded annually. You expect to get an annual raise of 2%, which will offset inflation, and you will let the amount you deposit each year also grow by 2% (i.e., your second deposit will be 2% greater than your first, the third will be 2% greater than the second, etc.). How much must your first deposit be to meet your goal? Round your answer to the nearest cent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started