Let us develop a savings plan for your retirement. We will assume that you will be fin- ished with your schooling by age 25, and work for 40 years to retire at age 65. Let us (very generously and optimistically) imagine that you will receive a substantial graduation gift of $10,000, and will open an investment account with it that (again, quite optimistically) can be expected to reliably pay 8% interest, compounded continuously. In addition, you will plan to save a portion of your paycheck each week, for a total of D dollars per year, every year. Determine D, i.e how much you need to add to your account from your earnings every year, in order to retire with a princely sum of $2,000,000 in your retirement account.
Let us develop a savings plan for your retirement. We will assume that you will be fin-
ished with your schooling by age 25, and work for 40 years to retire at age 65. Let us (very
generously and optimistically) imagine that you will receive a substantial graduation gift
of $10,000, and will open an investment account with it that (again, quite
optimistically) can be expected to reliably pay 8% interest, compounded continuously. In
addition, you will plan to save a portion of your paycheck each week, for a total of D dollars
per year, every year. Determine D, i.e how much you need to add to your account from your
earnings every year, in order to retire with a princely sum of $2,000,000 in your retirement
account.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
