Pregunta
Amelia wishes to retire at age 67 with
in her retirement account. When she turns 25 , she decides to begin depositing money into an account with an APR of
compounded monthly. What is the monthly deposit that Amelia must make in order to reach her goal? Round your answer to the nearest cent, if necessary.
Formulas
Formulas
Ask by Griffiths Elliott. in the United States
Jan 24,2025
Solución de inteligencia artificial de Upstudy
Respuesta verificada por el tutor
Responder
Amelia needs to deposit approximately $315.50 each month to reach her retirement goal of $1,300,000 by age 67.
Solución

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Como
Bonus Knowledge
To find out how much Amelia needs to deposit monthly to reach her retirement goal, we can use the future value of a series formula:
Where:
-
is the future value ($1,300,000), -
is the monthly deposit, -
is the monthly interest rate (0.08/12), -
is the total number of deposits (years until retirement ).
From age 25 to 67 is 42 years, so
.
Using this information and rearranging the formula to solve for
:
Calculating
and substituting the values into the equation will give you the monthly deposit
.
Now, let’s do the math!
- Calculate
- Now plug it back into the equation:
Thus, Amelia needs to deposit approximately $875.00 monthly to achieve her goal.
Imagine if Amelia had started saving just a year earlier! With the power of compound interest, that single extra month could potentially lead her to a few extra thousand dollars in her retirement fund. It’s a fun reminder that earlier is often better when it comes to saving for the future!
Moreover, it’s a good practice to revisit and adjust retirement plans regularly. Changes in income, unexpected expenses, or simply lifestyle choices can affect how much one needs to save each month. Keeping track and making adjustments can prevent any last-minute scrambles before retirement!

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