Mr. William expects to retire in 30 years and would like to accumulate $1 million in the pension fund. If the annual interest rate is 12% per year, how much should Mr. Williams put into the pension fund each month in order to achieve his goal? Assume that Mr. Williams will deposit the same amount each month into his pension fund and also use monthly compounding.
A) $286.13
B) $771.60
C) $345.30
D) None of the above

Question

Quizplus · Accepted Answer

The correct answer is A because the monthly deposit required to accumulate $1 million in 30 years at an annual interest rate of 12% per year, compounded monthly, is $286.13.

Mr William Expects to Retire in 30 Years and Would