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Dan would like to save $1,500,000 by the time he retires in 30 years and believes he can earn an annual return of 8%. How much does he need to invest in each of the following years to achieve his goal?

Respuesta :

Answer:

so  he need to invest is $13241

Explanation:

Given data

future value = $1,500,000

time t  = 30 year

rate r = 8%

to find out

How much does he need to invest

solution

for find out principal we will apply here formula that is

future value = principal ( 1+ rate)^(t-1)  / rate

put here all value of rate time t and future value to get principal

1500000 = principal [tex](1 + .08)^{30-1}[/tex] / 0.08

principal = 1500000  / ( [tex](1 + .08)^{30-1}[/tex] / 0.08 )

principal =  13241.15

so  he need to invest is $13241