Question

You have $100,000 invested today. If you add $300 per month to your investments, after 35 years, assuming 8% annual interest, how much do you have total?

Answer 1

Answer:

$942,681.75

Explanation:

This is a combination of a one-time cashflow and an annuity that you are required to find future value(FV) of. Using a financial calculator, input the following and adjust the duration and interest rate to monthly basis.

N= 35*12 = 420

Monthly interest rate ; I/Y = 8%/12 = 0.667%

One time cashflow; PV = -100,000

PMT = 300

then compute future value; CPT FV = 942,681.748

Therefore, you will have a total of $942,681.75