you want to retire in 30 years. You intend to invest $200 per month into a mutual fund that you expect to return 12% per year (1% monthly). If you continue making these monthly investments for 30 years, what amount of money will you have at the end of the 30th
$6000
To calculate the amount of money you will have at the end of the 30th year, we can use the compound interest formula.
The formula to calculate the future value of an investment with compound interest is:
FV = P * (1 + r)^n
Where:
FV = future value (amount of money at the end of the investment period)
P = principal amount (monthly investment)
r = interest rate per period (monthly interest rate)
n = number of periods (in this case, 30 years or 360 months)
In this scenario, the principal amount is $200 per month, the interest rate per period is 1% (0.01), and the number of periods is 360 months.
Using these values, we can calculate the future value:
FV = $200 * (1 + 0.01)^360
Let's calculate this:
FV = $200 * (1.01)^360
FV ≈ $1,148,698.124
Therefore, if you continue making monthly investments of $200 for 30 years with an expected return of 12% per year (1% per month), you would have approximately $1,148,698.124 at the end of the 30th year.