How much would you need to set aside each year for 28 years, at 3% interest, to have accumulated $100,000 at the end of the 28 years?

Finance Dec 21, 2020

Expert Solution

Answer-

Amount acumulated = Future value = FV = $ 100000
Number of years = N = 28
Interest rate = I/Y = 3 %
Present value = PV = $ 0
Yearly Payment that needs to set aside = PMT = ?

By substituting the values in financial calculator we get

Yearly Payments = PMT = $ 2329.32

Therefore the amount that needs to set aside every year = $ 2329.32

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