Question

If your financial goal is to save at least $40,000 in 10 years, what would be the least

Answer 1

The least amount of money you would need to invest per month is; $335

The anticipated rate of return on your investments is; 7%

• Amount to have been saved at the end of 10 years ≥ $40,000

Number of years of savings = 10 years.

• We want to find out the least amount to be invested per month.

There are 12 months in a year. Number of months in 10 years = 10 × 12 = 120 months.

• Thus, amount to be saved monthly = 40000/12 = $333.33

• Since the minimum amount he wants to save after 10 years is $40000, then we need to approximate the monthly savings in order.

Thus;

Monthly savings ≈ $335

• Now, for the anticipated rate of return on the investment, we know from S & P's that the benchmark on good rate of return for investment is a minimum of 7%.

• From online calculator, the worth of the investment after 10 years based on 7% rate of return yearly would be $57626.

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