Compute how much money you would need to invest each year in the future for u+20 years in order to have $1 million in u+20 years if you earn 3.47% per year? U=12

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Compute how much money you would need to invest each year in the future for u+20 years in order to have $1 million in u+20 years if you earn 3.47% per year?

U=12

Expert Solution
Introduction and Formula

Solution:-

When an equal amount is invested each period, it is known as annuity.

We know, future value of annuity = PMT x [(1+r)n – 1] / r

where, PMT = equal periodic amount

r = periodic interest rate

n = number of periods

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