Let's say you want to retire in 20 years with a million dollars. You invest some money in a mutual fund that expects to earn an average of 8% per year compounded monthly. How much money do you need to invest?
Solve 
Step 
*** i = 0.08 ÷ 12 » 0.006 
k = 12, r = 0.08, Monthly means 12 times a year 
PV = FV(1 + i)^{}^{kn } = FV ÷ (1 + i)^{kn }  Find the Present Value 
PV = 1,000,000 ÷ (1 + 0.006)^{12(30)} 
FV = 1,000,000, n = 20 years 
PV = 1,000,000 ÷ (1 .006)^{360} » 91,443.37 

You would have to invest $91,443.37 to earn a million dollars after 20 years.. (before taxes)  
*** Don't round. Enter 1000000 ÷ (1 + 0.08 ÷ 12) x^{y } (12 × 30) [enter or =] in your calculator  
Hint: don't round until you are completely finished with your calculations. 