128k views
3 votes
How much should you invest each month in order to have $800,000 if your rate of return is 2.8% compounded monthly and you want to achieve your goal in 40 years? How much interest will you earn? How much should you invest each month in order to have $800,000 if you want to achieve your goal in 20 years? If you deposit the amount you need to achieve your goal in 20 years, how much will your savings be worth after 10 years?​

User Jeremad
by
7.7k points

1 Answer

3 votes

Answer:

if you want to achieve your goal in 20 year, you would have to invest 1879.790424 at the end of each month for 240 months. you will have 800,000 after 20 years.

Explanation:

rate of return is 5.3% compounded monthly.

number of years = 40.

future value = 800,000

interest rate per month is 5.3% / 12 = .4416666....%

number of time periods if 40 * 12 = 480

payment required at the end of each month is equal to 484.5267545

your total payments are 480 * 484.5267545 = 232,572.8422

total interest earned would be 800,000 minus 232,572.8422 = 567,427.1578

if you want to achieve your goal in 20 year, you would have to invest 1879.790424 at the end of each month for 240 months.

you will have 800,000 after 20 years.

if you deposit that money for an additional 10 years at the same rate of interest per year compounded annually, then you will have 1,357,560.674.

you can use an online calculator to get the results similar to this.

they might not be right on because of possible rounding errors, but they'll be close.

User Mathbl
by
7.9k points