math

posted by .

How much must be set aside each month at 12% annual growth compounded monthly for 30 years in order to be able to retire on \$4,500 per month for 15 years at 3% annual growth compounded monthly?

• math -

x(1.01^360 - 1)/.01 = 4500(1- 1.0025^-180)/.0025
x(3494.964133) = 651624.6215
x = 186.4467..
x = \$186.45

check:
amount of 186.45 deposited monthly for 360 months at .01
= 186.45(1.01^360 - 1).01
= 651636.06

if I use 186.4476.. I get 651624.6214 , the fact that your deposit gets rounded off to the nearest penny explains the \$11.40 discrepancy.

Similar Questions

Meg's pension plan is an annuity with a guaranteed return of 7% interest per year (compounded monthly). She would like to retire with a pension of \$20000 per month for 20 years. If she works 28 years before retiring, how much money …
2. bus math

Meg's pension plan is an annuity with a guaranteed return of 7% interest per year (compounded monthly). She would like to retire with a pension of \$20000 per month for 20 years. If she works 28 years before retiring, how much money …
3. math

Meg's pension plan is an annuity with a guaranteed return of 7% interest per year (compounded monthly). She would like to retire with a pension of \$20000 per month for 20 years. If she works 28 years before retiring, how much money …
4. annuaties

Mr. Strupp expects to retire in 12 years. Beginning one month after his retirement, he would like to receive \$500 per month for twenty years. How much must he deposit into a fund today to be able to do so if the rate of interest on …
5. Finance

Meg's pension plan is an annuity with a guaranteed return of 7% interest per year (compounded monthly). She would like to retire with a pension of \$90000 per month for 25 years. If she works 33 years before retiring, how much money …
6. ctu

Diane works at a public university. She contributes \$625 at the end of each month to her retirement fund. For the past 10 years, this fund has returned 3.84% a year, compounded monthly. a. Assuming the 3.84% rate continues, how much …
7. Finite Math and Applied Calculus

Betty Sue sets up a retirement account. For the first 35 years, she deposits \$500 at the end of each month into an account with an annual interest rate of 3.6%, compounded monthly. Then, she stops making monthly payments and transfers …