Question

Mark wants to be a millionaire by the time he retires at age 65. He assumes there is a 6% annual interest rate. If he starts saving at age 20, he will need to invest $4,700 each year. If he starts saving at age 30, he will need to invest $9,000 each year. How much more money will Mark have to save if he starts saving at age 30 instead of age 20? A) $150,500 B) $103,500 C) $43,000 D) $4,482

Answer 1

B is the answer for this question. :)

Explanation:

Answer 2

Option B

Explanation:

We're been given with:-

Rate of Interest (r) = 6%

Age of retirement = 65

Amount of money invested each year if Mark starts saving at age 20 = $4700

Amount of money invested each year if Mark starts saving at age 30 = $9000

1) Number of years needed to invest if Mark starts saving at age 20 = 65-20

= 45

2) Number of years needed to invest if Mark starts saving at age 30 = 65-30

= 35

3) Total amount of money invested if Mark starts saving at age 20 = Principle invested * time

= 4700 * 45

= $ 211500

4) Total amount of money invested if Mark starts saving at age 30 = Principle invested * time

= 9000 * 35

= $ 315000

5) Amount of money Mark will have to save if he starts saving at age 30 instead of age 20 = 315000 - 211500

= $ 103,500