finance (saving for $1,000,000)
posted by Jason on .
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 TI83.....
N=(655)*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

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)^7201]
x = 21.27
I used .00833 instead of .1/12 to the accuracy of the calculator, suspect your answer more accurate 
thank you