Math
How much should you deposit at the end of each month into an investment account that pays 7.5% compounded monthly to have $2 million when you retire in 41 years? How much of the $2 million comes from interest? How much should you deposit?
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Assuming you are starting from an initial balance of zero, you would need to deposit $849 every month into an investment account with a 7.5% interest rate, compounded monthly for 41 years to reach $2 million. This would provide a total of $1,511,548.27 in interest earnings on the $2 million, which is 75.6% of the total account balance. This calculation is based on the formula (A=P(1+r/n)^(nt), where A is the future value, P is the present value (or the amount you are depositing monthly in this case), r is the interest rate, n is the number of compounding periods in a year and t is the number of years invested.
