if someone wants to have $500,000 at the end of a 35 year ira at 7.2%. How much should be put into the account annually
You must deposit $3,462.30 every year for 35 years. The formula you would use to calculate that is: FV=P{[1 + R]^N - 1/ R}=FV OF $1 PER PERIOD,
Where R=Interest rate per period, N=number of periods, P=periodic payment, FV=Future value.
This formula to calculate the above is more direct one:
PMT=FV{[[1 + R]^N - 1]^-1. R}=PMT NEEDED TO SAVE $1 IN THE FUTURE.
if you are going for 500,000 at the end of 35 years you are setting your goals too low lol
ive been in the finantial buisness for about 8 years now and in 35 years with a roth ira fund or with a fedelity freedom fund lets say 2045 or 2050 you would end up with alot more than 500,000 dollars yes there is alot of fluquations and it is high risk investment but the good thing is that with the freedom fund you wouldnt have to actually distibute your money becaue they would have managers do that for you but i only recommend these for people who wont take money out early because you will get taxed and fee'd by the government for alot of the money you invested but if you start out with 2,500 dollars and you invest 50-200 dollars a month you will end up with 610,000-914,000 depending on how dedicated you are
