How much should you deposit at the end of each month in an IRA that pays 6%compounded monthly to earn$110,000 per year from interest alone, while leaving the principal untouched, to be withdrawn at the end of each year after you retire in 50 years? The monthly deposit is $_______________ . (Round up to the nearest dollar.
How much should you deposit at the end of each month in an IRA that pays 6%compounded monthly to earn$110,000 per year from interest alone, while leaving the principal untouched, to be withdrawn at the end of each year after you retire in 50 years? The monthly deposit is $_______________ . (Round up to the nearest dollar.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 1P
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Question
How much should you deposit at the end of each month in an IRA that pays 6%compounded monthly to earn$110,000 per year from interest alone, while leaving the principal untouched, to be withdrawn at the end of each year after you retire in 50 years?
The monthly deposit is
$_______________
.
(Round up to the nearest dollar.
Expert Solution
Step 1
First, we need to compute the corpus required to get annual interest.
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