How long would it take for you to save an adequate amount for retirement if you deposit $40,000 per year into an account beginning today that pays 12 percent per year if you wish to have a total of $1,000,000 at retirement? PLEASE show how to do it on a Financial calculator

Accounting Mar 04, 2021

How long would it take for you to save an adequate amount for retirement if you deposit $40,000 per year into an account beginning today that pays 12 percent per year if you wish to have a total of $1,000,000 at retirement? PLEASE show how to do it on a Financial calculator.

A) 12.2 years

B) 10.5 years

C) 14.8 years

D) 11.5 years

Expert Solution

Answer:

The time period is computed as follows:

Since the payments are at the beginning, kindly set the calculator in beginning mode.

Plug the below variables as follows:

FV = 1,000,000

PV = 0

PMT = - 40,000

I/Y = 12

Finally press CPT and then N. It will give n equal to 11.5 years Approximately

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