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Henry is going to retire in 34 years and would like to have $500,000 by that time. An investment plan has a guarantee return of 8 %, compounded monthly. How much does he need to invest today to achieve his retirement goal?

Guest Mar 15, 2017
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Henry is going to retire in 34 years and would like to have $500,000 by that time. An investment plan has a guarantee return of 8 %, compounded monthly. How much does he need to invest today to achieve his retirement goal?

 

500 000 = PV(1+0.08/12)^(34*12)

 

PV= 500000/((1+0.08/12)^(34*12)) 

 

500000/((1+0.08/12)^(34*12)) = $33,236

 

 

check

33236(1+0.08/12)^(34*12) = 499999.48   That is great :)

Melody  Mar 15, 2017

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