Huzefa K. answered • 11/10/14

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Math Teacher|Michigan + Northwestern Law|Perfect Score Math ACT + SAT

You currently have 50,000 and you want to end up with 1,000,000 in 30 years. I have to assume that the amount of money you need to save will be put in right at the beginning of this 30 year period. Accordingly, the equation you need is as follows:

1,000,000 = (50,000 + x)*(1.07)^30

Essentially, this is a compound interest problem. You have the principal amount multiplied by the interest rate with the total period as the exponent. Now we just solve for x.

1,000,000 = (50,000 + x)(7.612)

131,371.52 = 50,000 + x

81,371.52 = x

So, you need to save an additional

**$81,371.52**