SOLUTION: How much should you invest each month in order to have $300,000 if your rate of return is 3% compounded monthly and you want to achieve your goal in 20 years? How much will your sa

Algebra ->  Finance -> SOLUTION: How much should you invest each month in order to have $300,000 if your rate of return is 3% compounded monthly and you want to achieve your goal in 20 years? How much will your sa      Log On


   

Question 1183166: How much should you invest each month in order to have $300,000 if your rate of return is 3% compounded monthly and you want to achieve your goal in 20 years? How much will your savings be worth after 10 years?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
use the calculator at https://arachnoid.com/finance/index.html

first you want to find the payment required.

inputs are:

present value is equal to 0
future value is equal to 300000
number of periods is equal to 20 years * 12 = 240 months.
interest rate per period is equal to 3% per year / 12 = .25% per month.
payments are made at the end of each period.

output is:

payment = -913.79.

it's negative because it's money going out.
future value is positive because it's money coming in.

results are shown below:



now that you know the payment required, next you want to find the future value after 10 years.

inputs are:

present value is equal to 0
number of periods is equal to 10 years * 12 = 120 months.
payment amount is equal to -932.79
interest rate per period = 3% per year / 12 = .25% per month.
payment is made as the end of each time period.

output is:

future value = 127,694.31

results are shown below:



a month by month analysis for selected months is shown below.