00:01
Suppose you want to have $300 ,000 in a retirement account in 20 years.
00:05
Your interest earns 7%, and that's going to be annually.
00:09
So i'm put per year.
00:11
How much do you need to deposit in this account for this, and how much interest will you earn? so we have our information here.
00:20
We have our balance that we want.
00:24
We need to know the deposit.
00:26
So when we look at our interest rate, it's 7 % per year, so we need to think of that as 7 % percent per over 12 months.
00:35
That's going to be the interest rate we're going to use here and here.
00:38
So the number of deposits is going to be a monthly deposit over 20 years.
00:43
So we're going to take 20 times 12 to get 240 deposits.
00:48
That's going to be our value of n.
00:50
So let's go ahead and figure this out.
00:52
We're going to have 300 ,000 equals d times 1 plus .07 over 12 to the 240.
01:01
Minus 1 over 0 .07 over 12...