Question

Reconsider Table 21-1, and assume that as in Problem 21-23, you wish to save enough this year to have \( 50,000 available for your planned retirement 30 years into the future. How many dollars would you have to save this year to ensure that a total amount of \) 50,000 would be accumulated 30 years into the future if the interest rate appropriate for discounting decreases to 3 percent?

Short answer

$\$1716.73$

Step-by-step solution

Given Information

Discounted value is characterized as the ongoing worth of a future amount of cash, the future amount of cash is limited at the rebate rate. Contingent on the rebate rate current worth of a future amount of cash might increment or diminish.

Explanation

We know,

Amount is $\$50000$

Time = $30yrs$

$\Rightarrow \frac{50000}{30}=1666.66$

The discount rate for the first year is $0.926$

$\Rightarrow \frac{1666.66}{0.971}=1716.73$

Hence $\$1716.73$has to be saved