Math Problem Statement
Suppose you want to have $500,000 for retirement in 30 years. Your account earns 7% interest.
a) How much would you need to deposit in the account each month?
Solution
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Math Problem Analysis
Mathematical Concepts
Compound Interest
Future Value of Annuity
Algebra
Formulas
Future value of an annuity formula: FV = P × [(1 + r)^n - 1] / r
Rearranged formula to find monthly deposit: P = FV / [(1 + r)^n - 1] / r
Theorems
Compound Interest Theorem
Annuity Growth Formula
Suitable Grade Level
Grades 10-12
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