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Suppose you wish to retire at the age of 60 with $70,000 in savings
Suppose you wish to retire at the age of 60 with $70,000 in savings. Determine your monthly payment into an IRAitthAPR is 8.5 % compounded monthly and you begin making payments at 35 years old. Round your answer to the nearest cent, if necessary.
Expert Solution
Computation of Monthly Payment using PMT Function in Excel:
=pmt(rate,nper,pv,-fv)
Here,
PMT = Monthly Payment = ?
Rate = 8.5%/12 compounded monthly
Nper = (60 - 35) years*12 months = 300 months
PV = 0
FV = $70,000
Substituting the values in formula:
=pmt(8.5%/12,300,0,-70000)
PMT or Monthly Payment = $67.83
So, the monthly payment into an IRA is $67.83 If you have any doubt you can ask me through comment box.
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