You want to have $2 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 8 percent and the inflation rate is 5.3 percent.


What real amount must you deposit each year to achieve your goal? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

To determine the real amount you must deposit each year to achieve your goal, we'll need to account for both the nominal return on your investment and the inflation rate.

First, let's calculate the adjusted nominal return by subtracting the inflation rate from the nominal return:

Adjusted Nominal Return = Nominal Return - Inflation Rate
= 8% - 5.3%
= 2.7%

Next, we can use the future value of an annuity formula to calculate the annual deposit needed:

Future Value of Annuity = Annual Deposit × [(1 + Adjusted Nominal Return)^Number of Years - 1] / Adjusted Nominal Return

Since you want to have $2 million in 30 years, the future value of the annuity is $2 million. We can substitute the known values into the formula and solve for the annual deposit:

$2,000,000 = Annual Deposit × [(1 + 0.027)^30 - 1] / 0.027

Now we need to rearrange the formula to solve for the annual deposit:

Annual Deposit = ($2,000,000 × 0.027) / [(1 + 0.027)^30 - 1]

Calculating the final answer using a calculator or spreadsheet software, the annual deposit needed to achieve your goal is approximately $15,243.73.