How to Become a Millionaire

How much money would you need to save every year in order to become a millionaire? It’s less than you think, thanks to the miracle of

TIME VALUE OF MONEY!

You just received $10,000 from your generous Aunt Sue who told you to invest it.

The interest rate is 10%.

If you want to have $1,000,000

(A Million Dollars!) 40 years from now,

how much do you need to save each year?

Don't know how to answer this?

By the end of the lesson, you will!

Go to the next slide to learn how!

Let's try our original problem again.

You just received $10,000 from your generous

Aunt Sue who told you to invest it (money out).

(PV = -10,000)

The interest rate is 10%. (RATE = .10)

If you want to have $1,000,000 (FV=1,000,000)

40 years from now (NPER = 40),

how much do you need to save each year (PMT = ?)

Remember to Use:

You just received $10,000 from your generous

Aunt Sue who told you to invest it (money out).

(PV = -10,000)

The interest rate is 10%. (RATE = .10)

If you want to have $1,000,000 (FV=1,000,000)

40 years from now (NPER = 40),

how much do you need to save each year (PMT = ?)

Answer = ($1,236.82) or -$1,236.82

Spreadsheet Answer