Question

On the advice of your finance professor, you decide to start saving for your retirement immediately. At the end of every year, you deposit $7,500 into the account. If you can earn 8% per year on the account and want $1,500,000 in the account upon retirement, how many years will it be until you can retire

Answer 1

Step-by-step explanation:

Future value = 1500000

rate of interest = 8%

annual instalment of deposit = 7500

time t ?

1500000 = 7500 x [ ( 1.08 )ⁿ - 1 ] / .08

16 = ( 1.08 )ⁿ - 1

( 1.08 )ⁿ = 17

n log 1.08 = log 17

n = log 17 / log 1.08

= 1.23045/ .033423

= 36.81 years .