How much should you deposit at the end of each month in an ira that pays 8% compounded monthly to earn $80,000 per year from interest alone, while leaving the principal untouched, to be withdrawn at the end of each year after you retire in 40 years?

$276.10

Step-by-step explanation:

The balance required to generate $80,000 in annual interest must be determined first. 8% compounded monthly has an APY of ...

(1 +.08/12)^12 -1 ≈ 0.0829995 ≈ 8.3%

To generate $80,000 in interest, the balance must be ...

$80,000/0.0829995 ≈ $963,861.15

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We can use a financial calculator to find the monthly payment required have that balance after 40 years of payments earning interest at 8% compounded monthly. It tells us the payment amount is $276.10.

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step-by-step explanation: