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Homework answers / question archive / Suppose you want to have $600,000 for retirement in 25 years
Suppose you want to have $600,000 for retirement in 25 years. Your account earns 4% interest. How much would you need to deposit in the account each month? (Round up to the cents place.)
Computation of Monthly Deposit using PMT Function in Excel:
=pmt(rate,nper,pv,-fv)
Here,
PMT = Monthly Deposit = ?
Rate = 4%/12 = 0.3333% compounded monthly
Nper = 25 years*12 months = 300 months
PV = 0
FV = $600,000
Substituting the values in formula:
=pmt(0.3333%,300,0,-600000)
PMT or Monthly Deposit = $1,167.02