I want 500,000 in 30 yrs at 8.25%, compounded each quarter. How much do I need to invest now and how much of it is interest?

Question

Can you show me the formula for this?

Answer 1

A = P(1+r/n)^nt

 

P is principal

r is 8.25%

n is 4 (compounded quarterly)

t is 30 (years)

 

500,000 = P(1 + .0825/4)^4*30

 

500,000 = P(1.020625)¹²⁰

 

500,000 = 11.5863P

 

P= 500,000/11.5863 = 43154.42

 

$43,154.42