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Homework answers / question archive / 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

Economics

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. 
 

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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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