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You want to invest equal monthly amounts over the next 20 years to reach your goal...

You want to invest equal monthly amounts over the next 20 years to reach your goal of $500,000. If you can earn 8.00 percent on your invested funds, how much do you need to invest monthly to reach your goal?

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Answer #1

Information provided:

Future value= $500,000

Time= 20 years*12= 240 months

Interest rate= 8%/12= 0.6667%

The monthly amount is calculated with the help of a financial calculator.

The below is entered in a a financial calculator to calculate the monthly amount:

FV= 500,000

N= 240

I/Y= 0.6667

Press the CPT key and PMT to calculate the monthly payment.

The value obtained is $848.87.

Therefore, the monthly amount is $848.87.

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