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Homework answers / question archive / You have a goal of saving $2,000,000 for retirement at age 65
You have a goal of saving $2,000,000 for retirement at age 65. If you are 23 years old and can invest at a rate of 7.5% per year, how much do you need to save monthly to accomplish your goal? You are starting with nothing saved for retirement.
Computation of Monthly Savings using PMT Function in Excel:
=pmt(rate,nper,pv,-fv)
Here,
PMT = Monthly Savings = ?
Rate = 7.5%/12 = 0.00625
Nper = (65-23)*12 months = 504 months
PV = 0
FV = $2,000,000
Substituting the values in formula:
=pmt(0.00625,504,0,-2000000)
PMT or Monthly Savings = $565.40
