Suppose you want to have $700,000 for retirement in 35 years. Your account earns 9% interest. How much would you need to deposit in the account each month?

Answer: you should deposit $236.2 each month.

Step-by-step explanation:

We would apply the formula for determining future value involving deposits at constant intervals. It is expressed as

S = R[{ (1 + r) ^n - 1) }/r][1 + r]

Where

S represents the future value of the investment.

R represents the regular payments made (could be weekly, monthly)

r = represents interest rate/number of payment intervals.

n represents the total number of payments made.

From the information given,

there are 12months in a year, therefore

r = 0.09/12 = 0.0075

n = 12 * 35 = 420

S = $700000

Therefore,

700000 = R[{ (1 + 0.0075) ^420 - 1) }/0.0075][1 + 0.0075]

700000 = R[{ (1.0075) ^420 - 1) }/0.0075][1.0075]

700000 = R[{ (23.06 - 1) }/0.0075][1.0075]

700000 = R[{22.06}/0.0075][1.0075]

700000 = R[2941.3][1.0075]

700000 = 2963.36R

R = 700000/2963.36

R = 236.2