Jamie wants to have 1000000 for her retirement in 25 years H

Jamie wants to have $1,000,000 for her retirement in 25 years. How much should she save annually if she thinks she can earn 10% on her investments?

Solution

Required Amount = Future Value, F = $1000000

Period of investment, n = 25 years

Rate of return, i = 10%

Let Amount to be saved annually be x

F = x * PVAF(i,n)

$1000000 = x * PVAF (10%,25)

x = 1000000 / PVAF (10%, 25)

x = 1000000 / 9.07704

x = 110168

Amount to be saved annually = $110168