Suppose you want to have € 0.5 million saved by the time you reach age 30 and suppose that you are 20 years old today.                                                                                                    If you can earn 5% (compounding yearly) on your funds, how much would you have to invest today to reach your goal?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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3.   Suppose you want to have € 0.5 million saved by the time you reach age 30 and suppose that you are 20 years old today.                                                                                                    If you can earn 5% (compounding yearly) on your funds, how much would you have to invest today to reach your goal? 
          manually using TVM functions  
FV Interest rate           Time period Compounding frequency Total number of compounding periods Present value of money Present value of money  
 (EUR) (as a decimal)  (number of years)  (times per year)  (EUR)  (EUR)  
5,000,000 0.05 10 1 10 306,956.63 306,956.63  
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