Suppose you want to have $400,000 for retirement in 20 years. Your account earns 10% interest. How much would you need to deposit in the account each month?

Question

Suppose you want to have $400,000 for retirement in 20 years. Your account earns 10% interest. How much would you need to deposit in the account each month?

Answer 1

Label what you know:

P = $400,000

r = .10

n = 12 months

t = 20 yrs

There are various formulas, but I use this one:

(P(r/n)) / (1-(1+(r/n))^-n*t)