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# Annual payment- Finance Time Value of money

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Computation of annual payment : You will retiring in 25 years and want to have amassed \$1 million in savings at the time you retire. Assume you can earn a 6% annual return per year for the next 25 years.

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```									              Sub: Finance                                                               Topic: Time Value of Money

Question:
Computation of annual payment .

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You will retiring in 25 years and want to have amassed \$1 million in savings at the time you
retire. Assume you can earn a 6% annual return per year for the next 25 years. Also assume
that you will be making equal annual contributions to this retirement fund (beginning one year
from today). What annual contribution will be required if you are to achieve your goal?

Solution:
Data given,

Future Value =                         \$1,000,000

Time period =                         25(Years)

Rate of Interest =                    6%

So Annual contribution =              \$18,226.72         Application of PMT function

** End of the Solution **

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