Question

Tommy wants to save $1 million for retirement in 50 years. Assume he invests in a

regular savings account that earns 4.8% interest annually. How much does Tommy
need to save today to reach his retirement goal?

Answer 1

Here, the formula would be:

P x (1 + rate)^50 = 1000000

With rate = 4.8% = 0.048, the money he needs to save today would be:

P = 1000000/(1 + 0.048)^50 = 95925.9$

Hope this helps!

:)