You want to have $200,000 in your account when you retire in 30 years. Your retirement account earns 8% interest. How much do you need to deposit each month to meet your retirement goal?
We’re looking for d.
r = 0.08, 8% annual rate
k = 12, since we’re depositing monthly
t = 30, 30 years
A = $200,000 The amount we want to have in 30 years
In this case, we’re going to have to set up the equation, and solve for d.
= $134.09
So, you would need to deposit $134.09 each month to have $200,000 in 30 years if your account earns 8% interest
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