how to calculate the annuity?
You begin to save for retirement by investing $ 660 per month in an annuity with a guaranteed interest rate 2% per year. With continued investment and capitalization, how much you have accumulated in the annuity when you retire in 41 years? (Rounds to the nearest cent.)
Suppose the 2% interest compounded monthly. then the monthly rate is .02/12. 41 years equals 492 months. The answer your question is: $ 660 x [(1 + (.02/12)) ^ 492 - 1] / (.02/12) = $ 897,904.40
Investing and Retirement Planning Tips: Personal Finance 101 (Part 1)
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