How do you calculate the future value of an investment if you don't know the present value and vice versa?

Suppose you earn $60,000/year
You will need 40% of your income at retirement
You will retire in 30 years
You will be in retirement for 20 years (assumed)
What are the present value and future value of the investment?

the interest rate is 6%

That is a very good question. And I might add never adequately addressed, because no one knows the answer. The inflation rate is unknown and over 30 years can mount to a great deal even if it were only 3%, which is most unlikely, and assuming you will need only 40% which is also most unlikely--more like 60%--then $24,000 today would equate to $58,300 in 30 years. That would be the minimum that you would need. I would mention that you might draw social security but I doubt that will be around much longer. So what you need to do is invest to be able to generate at least $58,300 in income plus also enough to be able to increase that amount by 3% annually for another 20 years.

So lets assume that you can earn a return of 8% annually, 5% in real terms. And you also will be able to earn 8% in 30 years. That means you will have to save enough to have $730,000 in 30 years. If you save $6500 a year and earn 8% on that money, in 30 years you will have $736,340. Which at 8% will generate $58,907. This is not quite sufficient to keep up with 3% inflation though. You really need to have enough to generate about another $1900 a year to allow for inflation giving a total of $60,800 that will need to be generated. So you really need $760,000 rather than $736,340. So you need to invest $6710 annually.

Anyway that is sort of how it works. There are three giant assumptions that are in play here. 1. the inflation rate, 2. the annual return on investment, and 3. the amount of money you will require upon retirement.

Sort of cute how the government will let you only invest $5000 into an IRA but you will actually need to save more than that to make your goal. If you were saving for 40 years instead of only 30 it would be a lot easier--maybe.

There is some missing information here: an interest rate or something. However, you will need 24,000 a year for 20 years, starting at year 30. The formula for the PV at time 30 is An: (1- (v ^n))/ i , whatever i is. The PV at now is that expression, times v^30, the discount factor.

Do you have the Interest rate?

you need $24000 yearly as annuity for 20 yrs.And suppose current year asT1 so u need to $24000 after 30 yrs onward.
so u need to find present vale of annuity for 24000 @ discount rate of 5%(inflation) for 30 yrs, which is equal to $368952. Ahain it should be discounted for 20 yrs @ 5% so that we can get its present value. Answer = $289258.368