QuestionAugust 22, 2025

How much should you invest each month in order to have 500,000 if your rate of return is 2.2% compounded monthly and you want to achieve your goal in 40 years? How much interest will you earn? square How much should you invest each month in order to have 500,000 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?

How much should you invest each month in order to have 500,000 if your rate of return is 2.2% compounded monthly and you want to achieve your goal in 40 years? How much interest will you earn? square How much should you invest each month in order to have 500,000 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?
How much should you invest each month in order to have 500,000 if your rate of return is 2.2%  compounded monthly
and you want to achieve your goal in 40 years?
How much interest will you earn?
 square 
How much should you invest each month in order to have 500,000 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?

Solution
4.6(259 votes)

Answer

Monthly investment for 40 years: \ 563.92 ### Interest earned in 40 years: \ 229,081.60 ### Monthly investment for 20 years: \ 1,522.65 ### Savings worth after 10 years: \ 204,758.82 Explanation 1. Calculate Monthly Investment for 40 Years Use the future value of an annuity formula: FV = P \frac{(1 + r)^n - 1}{r}, where FV = 500,000, r = \frac{0.022}{12}, and n = 40 \times 12. Solve for P. 2. Calculate Total Contributions for 40 Years Multiply monthly investment by total number of months (40 \times 12). 3. Calculate Interest Earned in 40 Years Subtract total contributions from 500,000 to find interest earned. 4. Calculate Monthly Investment for 20 Years Use the same annuity formula with n = 20 \times 12 and solve for P. 5. Calculate Future Value After 10 Years Use the future value formula for an annuity with n = 10 \times 12 using the monthly investment calculated for 20 years.

Explanation

1. Calculate Monthly Investment for 40 Years<br /> Use the future value of an annuity formula: $FV = P \frac{(1 + r)^n - 1}{r}$, where $FV = 500,000$, $r = \frac{0.022}{12}$, and $n = 40 \times 12$. Solve for $P$.<br /><br />2. Calculate Total Contributions for 40 Years<br /> Multiply monthly investment by total number of months ($40 \times 12$).<br /><br />3. Calculate Interest Earned in 40 Years<br /> Subtract total contributions from $500,000$ to find interest earned.<br /><br />4. Calculate Monthly Investment for 20 Years<br /> Use the same annuity formula with $n = 20 \times 12$ and solve for $P$.<br /><br />5. Calculate Future Value After 10 Years<br /> Use the future value formula for an annuity with $n = 10 \times 12$ using the monthly investment calculated for 20 years.
Click to rate:

Similar Questions