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Monthly Contribution to Pension Plan

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A man expects to retire in 30 years and would like to accumulate $1 million in his pension fund. Assume the man will deposit the same amount into his pension fund at the end of each month and enjoy monthly compounding. If the annual interest rate he expects is 12% per year, how much should the man put into the pension fund each month over the next 30 years in order to achieve his goal?

a) $286.13
b) $345.30
c) $771.60
d) None of the above is within plus or minus $5 of the correct monthly amount

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The solution computes the monthly contribution to pension plan.

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