Please show work. You want to have $2 million in real dollars in an account when

Question

Please show work.

You want to have $2 million in real dollars in an account when you retire in 43 years. The nominal return on your investment is 9.939 percent and the inflation rate is 3.2 percent. What is the real amount you must deposit each year to achieve your goal?

A)10,403

B)10,878

C)9,210
D)8,887
E)9,711

You want to have $2 million in real dollars in an account when you retire in 43 years. The nominal return on your investment is 9.939 percent and the inflation rate is 3.2 percent. What is the real amount you must deposit each year to achieve your goal?

A)10,403

B)10,878

C)9,210
D)8,887
E)9,711

Explanation / Answer

Real growth rate will be = (1.09939) /(1.032) -1 = 6.53%

each year deposit = 9209.68

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