Posted by **Jason** on Friday, July 25, 2008 at 10:55am.

At age 5, how much would you have to save per month to have $1 million in your account at age 65, if your investment rate was 10% per year? Assume no taxes and compounding on a monthly basis.

I use my TI-83.....

N=(65-5)*12

I%=10%/12

PV=0

PMT=0

FV=1,000,000

I used the solver for PMT

PMT= -21.2302

FINAL ANSWER IS $21.23 per month.....the negative represents a out cashflow

- finance (saving for $1,000,000) -
**Damon**, Friday, July 25, 2008 at 11:11am
compounding monthly so n = (65 - 5)12 = 720 payments

rate r = .10/12 = . .008333

call investment each month = x

then sinking fund (or amount of an annuity) calculation

x = 1,000,000 * .00833 / [(1.00833)^720-1]

x = 21.27

I used .00833 instead of .1/12 to the accuracy of the calculator, suspect your answer more accurate

- finance (saving for $1,000,000) -
**Jason**, Friday, July 25, 2008 at 11:32am
thank you

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