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finance (saving for $1,000,000)

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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) -

    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) -

    thank you

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