QuestionJuly 21, 2025

4 pts The company you work for will deposit 600 at the end of each month into your retirement fund Interest is compounded monthly. You plan to retire 15 years from now and estimate that you will need 2,000 per month out of the account for the next 20 years. If the account pays 8.0% compounded monthly, how much do you need to put into the account in addition to your company deposit in order to meet your objective? 0.00 57.59 90.99 95.88 104.49

4 pts The company you work for will deposit 600 at the end of each month into your retirement fund Interest is compounded monthly. You plan to retire 15 years from now and estimate that you will need 2,000 per month out of the account for the next 20 years. If the account pays 8.0% compounded monthly, how much do you need to put into the account in addition to your company deposit in order to meet your objective? 0.00 57.59 90.99 95.88 104.49
4 pts
The company you work for will deposit 600 at the end of each month
into your retirement fund Interest is compounded monthly. You plan to
retire 15 years from now and estimate that you will need 2,000 per
month out of the account for the next 20 years. If the account pays
8.0%  compounded monthly, how much do you need to put into the
account in addition to your company deposit in order to meet your
objective?
 0.00
 57.59
 90.99
 95.88
 104.49

Solution
4.5(228 votes)

Answer

\90.99 Explanation 1. Calculate Future Value of Company Deposits Use the future value of an annuity formula: FV = P \frac{(1 + r)^n - 1}{r}, where P = 600, r = \frac{0.08}{12}, and n = 15 \times 12. Calculate FV. 2. Calculate Present Value Needed for Retirement Withdrawals Use the present value of an annuity formula: PV = P \frac{1 - (1 + r)^{-n}}{r}, where P = 2000, r = \frac{0.08}{12}, and n = 20 \times 12. Calculate PV. 3. Determine Additional Amount Needed Subtract the future value from Step 1 from the present value in Step 2 to find the additional amount needed.

Explanation

1. Calculate Future Value of Company Deposits<br /> Use the future value of an annuity formula: $FV = P \frac{(1 + r)^n - 1}{r}$, where $P = 600$, $r = \frac{0.08}{12}$, and $n = 15 \times 12$. Calculate $FV$.<br /><br />2. Calculate Present Value Needed for Retirement Withdrawals<br /> Use the present value of an annuity formula: $PV = P \frac{1 - (1 + r)^{-n}}{r}$, where $P = 2000$, $r = \frac{0.08}{12}$, and $n = 20 \times 12$. Calculate $PV$.<br /><br />3. Determine Additional Amount Needed<br /> Subtract the future value from Step 1 from the present value in Step 2 to find the additional amount needed.
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