You want to have $600,000 when you retire in 20 years. If you can earn 3% interest compounded monthly, how much would you need to deposit now into the account to reach your retirement goal?

8 answers

Which formula do I use and how do I set it up?
https://www.thecalculatorsite.com/articles/finance/compound-interest-formula.php
Thank you!
You're welcome.
What if you're trying to figure out the principle?
let r = percent per year divided by 100*periods per year
each period the amount is increased by a certain multiplier.

like if 24% per year and monthly so 12 periods per year
then
r = 24%/(100*12) = 0.02

then multiply by (1+ r) each period
like when r = 0.02
multiply by (1.02) every period (month in this case)
if for five years then multiply principal by 1.02 sixty times
or by
(1.02)^60 = 3.28 about
SO in this case
final amount = original principal * 3.28
that is the PRINCIPLE behind finding the PRINCIPAL
Same formula, you just substitute in a different place
that is, ....
rate = .03/12 = .0025
600,000 = initial(1.0025)^240

solve for "initial"
Thanks everyone! I got it solved!