If you wanted to have $1,000,000 in savings at retirement, how much would you need to save each year over the next 30 years if you could earn 5% annually on your savings?
You need to save $1,000,000 in the next 30 years; your investment earns 5% annual interest.
Your present value PV is zero, the future value FV is $1,000,000, the interest rate i is .05, and the number of periods is 30. (Assuming that you are making yearly payments.) We are looking for the annual payment C:
The formula is FV= C *...
(The entire section contains 147 words.)
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