When you graduate college at the age of 20, you want to start saving up for retirement. If your investment pays a fixed APR of 9% and you want to have $2.5 million when you retire in 45 years, how much would you need to deposit, on a monthly basis, to reach this goal? Assume an ordinary annuity.

For an ordinary annuity, use the future-value formula FV = PMT × [((1 + r)^n − 1) / r], where the monthly rate is 0.09 ÷ 12 = 0.0075 and there are 45 × 12 = 540 deposits. Solving for PMT gives $2,500,000 × 0.0075 ÷ [(1.0075)^540 − 1] ≈ $337.62 per month, so the correct choice is $337.62.

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