Question

Shaun Barringer has started on his first job. He plans to start saving for retirement. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Shaun have at the end of 45 years? (Round to the nearest dollar.)

Answer 1

The amount Shaun will have at the end of 45 years is approximately $2,798,394.

Step-by-step explanation:

To calculate the amount Shaun will have at the end of 45 years, we can use the formula for the future value of annuity: FV = Pmt * [(1 + r)^n - 1] / r, where FV is the future value, Pmt is the annual investment, r is the interest rate, and n is the number of years.

In this case, Shaun's annual investment is $5,000, the interest rate is 10% (or 0.10), and the number of years is 45. Plugging these values into the formula, we have FV = $5,000 * [(1 + 0.10)^45 - 1] / 0.10 = $5,000 * [1.10^45 - 1] / 0.10.

Using a calculator or computer software, we find that the future value is approximately $2,798,394.