At age 35 you start saving for retirement. If your investment plan pays an APR of 6% and you want to have $1.5 million when you retire in 30 years, how much should you deposit monthly? Assume an ordinary annuity.

For an ordinary annuity, the future value is the monthly deposit multiplied by [((1 + i)^n − 1) / i]. The monthly rate is 0.06 ÷ 12 = 0.005, and there are 30 × 12 = 360 deposits. Solving for the deposit gives $1,500,000 × 0.005 ÷ [(1.005)^360 − 1] ≈ $1,493.26 per month, which is choice d, $1,493.26.

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