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What should your monthly contribution be if your goal is to have $400,000 in your retirement savings account after 50 years. Suppose your APR is 5.4%, and is compounded monthly and that contributions are made at the end of each month, including last month. 

 Feb 26, 2019
 #1
avatar+19326 
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I believe this describes an 'ordinary' annuity with payments at the end of the month

months = 50 yrs x 12 = 600 months

monthly interest = .054 / 12 = .0045 % /mo

FV = 400,000

 

FV = P [ ((1+i)^n-1)/i )      400000 = P (1.0045)^600 -1)/.0045       results in P = $130.53 / mo     

 Feb 26, 2019

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