Questions 16-20 all refer to the following situation: Because an expert member of the State Board of Nursing-Home Regulation is paid as a consultant rather than as a regular employee, she is not a participant in the state's retirement plan. With 30 years to go until age 65, she feels she needs to build up a "nest egg" of $300,000 to support herself in retirement. She has worked out a deal with Globe Insurance Co. for an annual interest rate of 9.6% compounded monthly over the 30-year period until retirement and now needs to know how large a monthly deposit she will have to make in order to guarantee a nest egg of that size.
18. The number of deposits to be made each year is:
c. 52
Nope,
please re-read the part following: "Questions 16-20 all refer to. . ." and/or see the equation for computing the size of the regular deposit (R), in dollars, which is:
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where |
F = |
Future value of the fund |
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|
i = |
Interest rate per deposit period |
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n = |
Number of deposits to be made |