Simple Amortorization?

Question

You have decided that you will need $250,000 above what your current retirement plan contains to survive and have a little fun when you retire. At the age of 35, you decide to start putting an amount into an annuity once a month. The account earns 6% compounded monthly. You plan to retire at the age of 65. Your savings plan is for exactly 30 years.

Answer 1

sounds like a homework assignment, mike. yes, the math is fairly simple to do, but you need to do it yourself. Start with the concept of wanting the 250k in 30 years--thats about 8k/year that you need to save. Factoring in the interest you will make, you'll need to contribute around 500/month (6k/year) and then whatever interest you will make can be factored in to bring you up to the 8k a year you'll need. The rest you will have to do on your own. A 6% interest rate, compounded monthly is not all that likely, in reality, which indicates it's a math/homework problem. Good luck!