You are saving for retirement. to live comfortably, you decide you will need to save $ 2 million by the time you are 65. today is your 22nd birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. if the interest rate is 5%, how much must you set aside each year to make sure that you will have $ 2 million in the account on your 65th birthday?

$13232.50 should be set aside each year

Explanation:

given data

save = $2 million

by time = 65 year

today age = 22

interest rate = 5%

to find out

how much must you set aside each year to make sure that you will have $ 2 million

solution

we know here number of payment will be

no of payment = 65 - 22 + 1

+1 is add here because 1st payment is today

no of payment = 44

so future value formula is

future value = present payment   .............1

put here value here r is rate and t is no of payment

$2 million = present payment

present payment = 13232.50

so $13232.50 should be set aside each year

answer; dogs;