As Jorge starts working now at the age of 23, he decides to make regular contributions to a savings account.He wants to accumulate enough by age 55 to fund an annuity of $6,900 per month until age 80.
What should his monthly contributions be? Assume that both accounts pay 8.5%, compounded
Monthly.Round to the nearest cent.
A)$446.46
B)$428.46
C)$432.46
D)$423.46
E)$410.84

Question

Quizplus · Accepted Answer

To find the monthly contributions, calculate the future value needed at age 55 to fund the annuity, then determine the monthly contributions required to reach that future value. The correct calculation results in a monthly contribution of $432.46.

As Jorge Starts Working Now at the Age of 23