CS 3414 Problem Statement 1
I need some help figuring out how much I need to save per month in
order to have enough money to retire from this place in 2015.
Here are the details:
- I want to have $500,000 saved by January 1, 2015.
- The savings fund I am looking at earns an interest rate that
depends on how much you have in the fund. In particular:
- A balance up to and including $50,000 earns a base
rate of r%.
- Balances greater than $50,000 but not greater than
$100,000 earn r% on the first $50,000 and
(r+0.5)% on the amount over $50,000.
- Balances over
$100,000 earn r% on the first $50,000,
(r+0.5)% on the amount between $50,000 and $100,000,
and (r+1.0)% on the amount over $100,000.
- I'm interested in the answer as it depends on the base annual
interest rate. Specifically, I want to know what
happens if r=4.0%,
4.5%,
5.0%,
5.5%, and
6.0%.
- I'm also interested in how the answer depends on when I
start, i.e., if I start on January 1 in 2003, or 2004, or 2005,
..., or 2014.
- Assume I will make each monthly deposit at the beginning of the
month, and that the interest is credited on the last day of the month.