You believe you will need to have saved $590,000 by the time you retire in 30 years in order to live comfortably. If the interest rate is 6% per year, how much must you save each year to meet your retirement goal? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

The amount of money you must save each year to meet your retirement goal is $7,462.86

Explanation:

Acording to the data, we have the following:

Future value =$590,000 , N = 30 years and I = 6%

Therefore, to calculate the amount of money you must save each year to meet your retirement goal you have to use the formula of the future value.

Future value = yearly deposit * FVIFA (N,i)

$590,000 = deposit * FVIFA (30 , 6%)

Deposit = $590,000 / 79.0582 = $7,462.86 . Money to save each year.

$7462.86

Explanation:

Given

FV= $590000

r =6%

n = 30

C =? period payments

So the future value of annuity is appropriate to use

FV = C × {(1+r)^t-1/r}

Then substitute in formula and solve for Annual savings (C)

590000 = C × {(1+0.06)^30-1/0.06}

590000 = C × 79.0582

C = 590000/79.0582

C = $7462.86

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it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!