Ross has decided that he wants to build enough retirement wealth that, if invested at 7 percent per year, will provide him with $3,900 of monthly income for 25 years. To date, he has saved nothing, but he still has 15 years until he retires. How much money does he need to contribute per month to reach his goal? First compute how much money he will need at retirement, then compute the monthly contribution to reach that goal. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Ross has decided that he wants to build enough retirement wealth that, if invested at 7 percent per year, will provide him with $3,900 of monthly income for 25 years. To date, he has saved nothing, but he still has 15 years until he retires. How much money does he need to contribute per month to reach his goal? First compute how much money he will need at retirement, then compute the monthly contribution to reach that goal. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Ross has decided that he wants to build enough retirement wealth that, if
invested at 7 percent per year, will provide him with $3,900 of monthly income
for 25 years. To date, he has saved nothing, but he still has 15 years until he
retires.
How much money does he need to contribute per month to reach his
goal? First compute how much money he will need at retirement, then
compute the monthly contribution to reach that goal. (Do not round
intermediate calculations and round your final answer to 2 decimal places.)
Answer is complete but not entirely correct.
Contribution per
$
2,892.18 X
month
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