Nominal yield of interest=8%=8\%=8% compounded monthly
So, effective rate of annual interest=(1+0.0812)12−1=8.299%=(1+\frac{0.08}{12})^{12}-1=8.299\%=(1+120.08)12−1=8.299%
Let retirement fund be R
Here, $20000=R+(R×0.08299×1)\$20000=R+(R\times0.08299\times1)$20000=R+(R×0.08299×1)
Hence, retirement fund, R=$18467.39R=\$18467.39R=$18467.39
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