Posted by Sally on Wednesday, February 29, 2012 at 11:25pm.
You want to have 1.5 million in real dollars in an account when you retire in 40 yeras. the nominal return on your investment is 11 percent and the inflation rate is 3.8 percent. What real amount must you deposit each year to achieve your goal?
My answer is this correct:
real interest rate = 6.94%
FV = 1.5 million
N = 40 yrs
pmt = $7,630.72
Real amount each month is $7,630.72

Math  Nick, Monday, December 3, 2012 at 6:05pm
Real rate = 113.8
= 7.2%
1,500,000/(1+0.072)^40= 92960.80
To check this is correct you can do:
92960.80*(1+0.072)^40= 1,500,000

Math  n, Sunday, March 9, 2014 at 11:52pm
edfd

Math  Amanda, Friday, November 21, 2014 at 1:21am
you need to use the Fisher formula to find the real interest rate
1+R=(1+r)x(1+h)
where R=11%nominal rate
h=3.8%inflation
and r= the real interest rate
1+.11=(1+r)x(1+.038)
r=6.94% =I/Y
N=40
PV=0
FV=1.5million
PMT=7630.72

Finance  Maria, Friday, February 19, 2016 at 5:09pm
You want to have $5 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 8 percent and the inflation rate is 3.9 percent.
What real amount must you deposit each year to achieve your goal?
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