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    Retirement Savings Problem

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    Retirement Savings. You believe you will need to have saved $500,000 by the time you retire in 40 years in order to live comfortably. If the interest rate is 6 percent per year, how much must you save each year to meet your retirement goal?

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    Solution Preview

    This is an annuity problem. The amount you save each year is an annuity and that should grow to $500,000 in 40 years at 6%. In order to find the future value ...

    Solution Summary

    The solution explains how to calculate the annual savings needed for a given amount at retirement.