Question

You plan to retire in 40 years. to provide for your retirement, you begin investing $4,000 per year in a fund that yields 7 percent annually. what will be the value of the retirement fund after 40 years? round to the nearest cent. do not include commas or $

Answer 1

To calculate the value of the retirement fund after 40 years, we use the formula for compound interest.

Step-by-step explanation:

To calculate the value of the retirement fund after 40 years, we can use the formula for compound interest:

FV = P(1+r)^n

• FV = future value of the retirement fund
• P = annual investment
• r = annual interest rate
• n = number of years

In this case, the annual investment is $4,000, the annual interest rate is 7%, and the number of years is 40:

FV = 4,000(1+0.07)^40

Calculating this equation gives us the value of the retirement fund after 40 years.