Don wants to have $50,000 available in 10 years for retirement living expenses and health care.If he earns an average of 8% on his investments,what amount must he invest each year?
A) $3,453
B) $5,000
C) $4,372
D) $4,003

Question

Quizplus · Accepted Answer

The future value of $1 invested at 8% for 10 years is $1.8598. To have $50,000 in 10 years, Don must invest $50,000/$1.8598 = $26,900. If he invests this amount evenly over 10 years, he must invest $26,900/10 = $2,690 each year.

Don Wants to Have $50,000 Available in 10 Years for Retirement