You hope to retire after 35 years and you need $750,000 in the bank to live the life you want after retirement

Finance Aug 21, 2020

You hope to retire after 35 years and you need $750,000 in the bank to live the life you want after retirement. You can earn 8% per year on your investments. How much must you save every year to reach your goal?

Expert Solution

We can calculate the annual savings by using the following formula in excel:-

=pmt(rate,nper,pv,-fv)

Here,

Pmt = Annual savings

Rate = 8%

Nper = 35 periods

PV = $0

FV = $750,000

Substituting the values in formula:

= pmt(8%,35,0,-750000)

= $4,352.45

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