Question

Sydney saved $10,000 during her first year of work after college and plans to invest it for her retirement in 20 years. how much will she have available for retirement if she can make 8% on her investment?

Answer 1

If the 8% is per year, we need to calculate the acquired value after 20 years with compound interest. Formula : AV : aquired value after 20 years V : starting value r : rate y : years AV = V x (1+r)^y AV = 10 000 x (1+0.08)^20 AV = 10 000 x 4.660957 AV = 46 609.57 She will have available 46 609.57 $ after 20 years with compound interest if she save 10 000$.