You want to have $300,000 in 15 years. You want to know how much you need to invest each month at an annual 5% growth rate (compounded monthly) to achieve that number? $704 $1,584 $1,122 $978
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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You want to have $300,000 in 15 years. You want to know how much you need to invest each month at an annual 5% growth rate (compounded monthly) to achieve that number?
$704
$1,584
$1,122
$978
Amount required or accumulated value (AV) = $300,000
Monthly interest rate (r) = 0.00416666666666667 (i.e. 0.05 / 12)
Monthly period (n) = 180 (i.e. 15 years * 12)
Amount need to invest each month (m) = ?
Accumulated value is the compounded value of all the future cash flows using appropriate interest rate.
We will use future value of ordinary annuity formula.
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