How much do you need to put away every month

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Reference no: EM132399282

You want to start saving to buy a boat in anticipation of a long and successful career in chemical engineering. If you start at the age of 25, you want to retire at 45, that boat will cost $550,000, and you think you can earn 4% on your savings:

a. How much do you need to put away every month (monthly compounding) to reach your goal? Show the equations you used, then use the PMT function on Excel to check your work.

b. You found a bank that does daily compounding, and you are willing to add to your account every day. How significant a change is this in your monthly contribution?

c. You received a signing bonus of $10,000 (at the age of 25), and you put this into the boat account too. Now what is your monthly contribution (compounded monthly?)

Reference no: EM132399282

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