Suppose you want to have $400,000 for retirement in 30 years. Your account earns 6% interest. how much interest will you earn?

Answer 1

A=P(1+r)^t

A is the amount you end up with (this is the Principal plus the Interest) = 400,000

P is the Principal (or how much you start investing with) we will compute

r is the rate as a decimal = .06

t is the time in years= 30

400,000 = P (1+.06)³⁰

400,000=P (1.06)³⁰

^{Divide both sides by} (1.06)³⁰

P=69644.05

To calculate the Interest earned we subtract the A minus P

400,000 - 69644.05=$330,355.95