You believe you will need to have saved $580,000 by the time you retire in 40 years in order to live comfortably.

You believe you will need to have saved $580,000 by the time you retire in 40 years in order to live comfortably. If the interest rate is 5% 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.)

Explanation
Some values below may show as rounded for display purposes, though unrounded numbers should be used for actual calculations.

Compute the annual savings needed to accumulate the desired retirement savings:

FV	=	C × {[(1 + r)t – 1] / r}
$580,000	=	C × [(1.0540 – 1) / .05]
C	=	$4,801.33

Calculator computations:

Enter

40

5

–580,000

N

I/Y

PV

PMT

FV

Solve for

4,801.33