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Calculating annuity values

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You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 30th birthday, and you decide, starting today and continuing on every birthday up to and including you 65th birthday, that you will put the same amount into a savings account. if the interest rate is 5%, how much must you set aside each year to make sure you will have $2 million in the account on your 65th birthday

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Solution Summary

Solution describes the methodology to calculate equal annual deposits so as to have a certain amount at retirement age.

Solution Preview

Targeted future value of deposits=$2,000,000

Let he deposits x amount per year on his each birthday.

Future value of x amount deposited on ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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