Question

Suppose that you want to have a 93,447 retirement fund after 41 years. How much will you need to deposit now if you can obtain an APR of 3%, compounded daily?
Assume that no additional deposits are to be made to the account

Answer 1

Answer:

In 34 years time retirement account will accumulate = $106,098.21

Explanation:

The value of an annuity investment at a certain rate of interest compounded for a definite period of time can be worked as follows:

Future Value = A × (1- (1+r)^(-34)

r - monthly interest rate = 9.5/12 = 0.79%

A - 875,

r = 0.79% ,

n = 34 × 12 = 408

FV = 875 × (1- (1.0079)^(-408))/0.0079

    = 875 ×121.2550968

   =    106,098.21

In 34 years time retirement account will accumulate = $106,098.21